Indebted China Evergrande faces risk of loan defaults, legal action, billionaire chairman Hui Ka-yan admits as profit tanks

The world’s most heavily indebted home builder has suspended construction at some projects, says Hui, as half-year profit plummets by 29 per cent

The Shenzhen-based developer can now only hope to survive, not make profit, says Ivan Li of Loyal Wealth Management

Reading Time:3 minutes

Evergrande chairman Hui Ka-yan admitted the company he founded was at risk of default. Photo: Nora Tam

Published: 9:29pm, 31 Aug 2021Updated: 11:55am, 15 Sep 2021

The billionaire chairman of the world’s most indebted developer, China Evergrande, has admitted his company faces the risks of defaulting on loans and legal action from creditors.

Hui Ka-yan, who founded the Shenzhen-based home builder in 1996, made the rare admission in an earnings statement on Tuesday as Evergrande reported a dramatic plunge in profits. The high-profile tycoon also revealed that construction work had been halted at some of the developer’s projects.

“The group has the risks of defaults on borrowings and cases of litigation,” said Hui.

Evergrande, the biggest construction company in China by sales, admitted that billions of yuans’ worth of repayments related to property development were overdue and that building work at some of its housing projects had been suspended as a result.

“The group will do its utmost to continue its operations and endeavour to deliver properties to customers as scheduled,” Hui said in the filing.

Perhaps tellingly, he did not meet the media for an interim results briefing, as would usually be the case.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x