As company teeters, Evergrande boss vows to overcome ‘darkest moment’

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Evergrande
Photo: VCG

The head of Chinese real estate group Evergrande, which is threatened with collapse, told employees in a letter that he is convinced the “darkest moment” can be overcome.

Xu Jiayin wrote sent the letter on Tuesday to mark the Chinese Mid-Autumn Festival, also known as the Moon Festival. It was circulated by state media.

It said Evergrande would be able to accelerate the resumption of full-scale construction and production and achieve the main goal of “ensuring the handover of buildings” to provide a “responsible response” to homebuyers, investors, partners and financial institutions.

Evergrande has accumulated debts equivalent to more than 300 billion dollars. Investors fear a default. The troubled group needs to raise fresh money to pay banks, suppliers and bondholders on time.

Fears of an imminent collapse caused Evergrande’s share price to fluctuate sharply again on Tuesday. On the Hong Kong Stock Exchange, the group’s papers lost more than 7 per cent at the peak, but recovered during the day. Since the beginning of the year, the group’s shares have already lost more than 85 per cent of their value.

The US rating agency S&P warned in a statement on Monday that it could not be assumed that the Chinese government would rescue the group.

Beijing would only be forced to intervene if there were widespread contagion resulting in the collapse of several large construction companies and posing systemic risks to the economy, the agency said. However, a bankruptcy of Evergrande alone would probably not lead to such a scenario, S&P added.

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