Timeline: China Evergrande’s Snowballing Debt Crisis

Timeline: China Evergrande’s Snowballing Debt Crisis

HONG KONG, Sept 24 (Reuters) – Debt-ridden property developer Evergrande Group (3333.HK) missed an interest payment deadline on dollar bonds, edging closer to potential default and stoking concerns that a collapse could send shockwaves through the Chinese economy and beyond. Read more

Here’s a timeline of the events that led to Evergrande’s debt troubles and what the developer has done to raise money so far:

August 2017

Join now for FREE unlimited access to Reuters.com


Evergrande is committing to debt reduction for the first time, aiming to reduce the net debt ratio to 70% by June 2020, from 240% in June 2017.

November 2018

The central bank names Evergrande as one of the few financial conglomerates under its oversight that it says could lead to systemic risk.

March 2020

Evergrande aims to reduce its debt by 150 billion yuan ($23.3 billion) a year for three years.

August 2020

Regulators are meeting with 12 major property developers, including Evergrande, to introduce caps for three different debt ratios in a pilot program dubbed “the three red lines”.

Evergrande sells 28% of its property management unit for $3 billion ahead of the unit’s initial public offering (IPO).

It is asking the Guangdong provincial government to approve a backdoor Shenzhen enrollment plan that has languished for four years, saying it could face a cash flow crisis.

September 2020

The company is offering 30% off properties for a month to boost sales.

October 2020

Evergrande raises $555 million in a slimmed-down secondary share sale in Hong Kong.

November 2020

It ends Shenzhen’s backdoor listing plan. Some strategic investors agree not to require repayment.

Evergrande Property Services Group Ltd (6666.HK) Hong Kong IPO raises $1.8 billion.

January 2021

China Evergrande New Energy Vehicle Group Ltd (0708.HK) raises $3.4 billion by bringing in six new investors.

March 2021

Evergrande is selling 10% of the Fangchebao online real estate and auto market to 17 investors for $2.10 billion in a pre-IPO deal.

It aims to hit all three caps on debt ratios by the end of 2022. It plans to list Fangchebao early next year and divest its water and tourism units, among others.

June 2021

Evergrande announces that it will sell more than half of its 58% stake in peer China Calxon Group Co Ltd (000918.SZ), valued at $386 million.

Fitch downgrades Evergrande from “B+” to “B” with a negative outlook.

Developer arranges HK$13.6 billion ($1.75 billion) to pay off maturing bond and interest on all other dollar bonds, says it will have no more bonds due before next March.

Evergrande hit one of regulators’ leverage ratio caps by reducing interest-bearing debt to about 570 billion yuan from 716.5 billion yuan six months earlier.

July 2021

A court orders the freezing of a bank deposit of 132 million yuan held by Evergrande at the request of China Guangfa Bank Co Ltd (GDDVB.UL). Evergrande says the loan is not due until March and plans to take legal action.

Some Hong Kong banks are refusing to provide new loans to buyers of two of Evergrande’s unfinished residential projects.

Evergrande drops special dividend proposal. S&P downgrades the company’s credit rating two notches from B+ to B- with a negative outlook.

Fitch downgrades Evergrande to “CCC+” from “B”.

August 2021

Evergrande agrees to sell stakes in internet unit HengTen Networks Group Ltd (0136.HK) for a total of HK$3.25 billion ($417.5 million).

Moody’s downgrades Evergrande’s Corporate Family Rating (CFR) two notches to “Caa1” from “B2”.

Legal sources say lawsuits against Evergrande across the country will be handled centrally by the Guangzhou Intermediate People’s Court.

S&P again downgrades Evergrande two notches to “CCC” from “B-“.

The company says it is in talks to sell certain assets, including stakes in Evergrande New Energy Vehicle and Evergrande Property Services.

State media is reporting that construction work has been halted on two Evergrande projects in Kunming, one of them for late payments. The other was to be delivered to buyers in October.

Hui Ka Yan is stepping down as chairman of flagship unit Hengda Real Estate Group which Evergrande says is due to the termination of its backdoor listing plan.

China’s central bank and banking watchdog summon senior executives and issue a rare warning that Evergrande must reduce its leverage risk and prioritize stability.

Evergrande warns of liquidity and default risks if it fails to resume construction, dispose of more assets and renew loans as it reports a 29% drop in net profit from one year to the next.

September 2021

President Hui Ka Yan leads a pledge-signing ceremony to promise buyers that he will complete construction of their homes.

China Chengxin International Credit Rating Co (CCXI) downgrades Evergrande and its onshore bonds from “AA” to “AA”, erasing the value of the bonds for use in repo transactions.

Moody’s downgrades China Evergrande’s Corporate Family Rating (CFR) from “Ca” to “Caa1”, with a negative outlook.

Fitch downgrades Evergrande to “CC” from “CCC+”, signaling a “likely” defect.

Evergrande is seeking an extension of interest payments on trust loans to creditors, including CITIC Trust.

President Hui promises in a forum to reimburse all of his mature wealth management products as soon as possible.

Investors crowd the lobby of Evergrande’s Shenzhen headquarters to demand repayment of the loans.

Evergrande says online speculation about bankruptcy and restructuring was “totally wrong”, but adds that it faced “unprecedented hardship”.

Evergrande says it has hired financial advisers to review its financial options and warned of cross-default risks amid falling real estate sales.

A local government in China’s Anhui Province is canceling a land use contract with a subsidiary of China Evergrande because the latter failed to pay for the land.

Hui says he will make it a top priority to help retail investors redeem the investment products.

Evergrande said it “resolved” a coupon payment on an onshore bond, but the September 23 deadline for paying $83.5 million in interest on a dollar bond passed without holders bonds are paid or heard by the company, two sources said.

($1 = 6.4451 Chinese Yuan)

($1 = HK$7.7842)

Join now for FREE unlimited access to Reuters.com


Reporting by Clare Jim; Editing by Sumeet Chatterjee, Stephen Coates and Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.

Robert P. Matthews