Evergrande Group, China’s second-largest property developer by sales, runs a risk of defaulting on its debts if the firm is unable to raise funds quickly. The situation is worsened for the firm because out of its $300 billion in liabilities, interest payment to bond holders come due on Thursday. Many analysts are saying the payments due on Thursday will be a key test in which can be characterized as a “Lehman Brothers moment,” of whether the developer will continue meeting obligations to bondholders even as it falls behind on payments to banks, suppliers and holders of onshore investment products.
The Evergrande Group
Evergrande Group is one of China’s largest real estate developers. According to the 2021 Fortune Global 500 List, it is the 122nd largest group in the world by revenue. The company is listed on the Hong Kong exchange and its base of operation is in the southern Chinese city of Shenzhen. The company is responsible for employing about 200,000 people and it also indirectly helps sustain more than 3.8 million jobs each year.
The company was founded by Chinese billionaire Xu Jiayin, who was once the country’s richest man. Evergrande made majority of its wealth in residential property. According to the company, it touts of owning “more than 1,300 projects in more than 280 cities” across China however, its operations extend far beyond that.