Troubles mount at Evergrande as pipe supplier threatens legal action over delayed payments

Shenzhen-listed pipe-producer Yonggao owed 478 million yuan (US$74 million) in commercial bills, of which 195 million yuan was overdue

Evergrande has more than 240 billion yuan of bills and trade payables from contractors to settle over the next 12 months, S&P Global says

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A woman walks past China Evergrande Centre, the Chinese developer’s headquarters in Hong Kong. Photo: Bloomberg

Published: 12:15pm, 25 Aug 2021Updated: 11:55am, 15 Sep 2021

Debt-laden developer China Evergrande Group has failed to pay some overdue bills, piping supplier Yonggao said, in the latest sign of a cash crunch at the teetering home builder.

Financial markets are worried that the size of Evergrande’s debts present a systemic risk were it to fail and the firm’s executives last week were issued a rare warning from regulators to get their house in order.

Yonggao now joins a handful of suppliers to threaten or launch legal action over missed or late payments.

In an exchange filing, the Shenzhen-listed pipe-producer said it was owed 478 million yuan (US$74 million) in commercial bills, of which 195 million yuan was overdue. It said it could sue the developer, adding that since May it had stopped deliveries.

Evergrande had no immediate response. It had pledged on Friday to do everything it can to resolve its debt issues, but markets appear to remain unconvinced and nervous.