Evergrande denies rumours of bankruptcy and reorganisation after weekend of protests at offices across China
- Evergrande has encountered unprecedented difficulties, but it is going all out to resume production and deliver buildings, company says
- Its chairman wants the firm to repay all of its matured wealth management products as soon as possible, sources say
The developer continues to find itself in the eye of the storm, as its liabilities of 1.97 trillion yuan (US$305 billion) could pose a systemic risk to China’s financial system were it to fail. Videos of investors airing grievances at Evergrande’s offices in mainland China went viral on local social media over the weekend.
The company announced new payment plans for its wealth management product investors on Monday in response to the rallies, according to people familiar with the matter. These products, offered through its internet finance affiliate, Evergrande Wealth Management, are owned mostly by its own employees.
“The repayment must be settled fairly … We must make every attempt to repay our investors according to the plan,” he said.
Tycoon makes executives sign pledges that Evergrande can deliver homes even with US$305 billion debt
Evergrande offered three payment methods for investors, according to an internal memo on Monday seen by the Post. Investors can choose to receive repayments through cash instalments, accepting 10 per cent of their principal and interest of matured products now and the remainder through 10 per cent instalments each quarter. Or, they can accept payments through property assets, or use the outstanding product value to offset the balance of any Evergrande residential unit bought.
Financial media outlet Caixin reported on Monday that a handful of Evergrande executives had received their repayments.
“I am broke and I just want my money back,” cried a woman in one of the videos circulating online. She was protesting outside Evergrande’s Chongqing offices. In another video of a rally at its Shenzhen offices, an elderly man was seen speaking to a company representative, demanding solutions.
“Your boss is such a high-profile businessman. Your company cannot do things like this. You should give the investors a detailed solution now,” he says in the clip.
The new repayment options follow plans initially released on Thursday last week, according to Bloomberg. These plans would have paid back investors holding less than 100,000 yuan in full, while those holding exactly 100,000 yuan to get back half.
Additional reporting by Pearl Liu