China’s property sector shows real signs of falling apart as Evergrande and now Kaisha Group are on the brink of default. We’ve been warni...
China’s property sector shows real signs of falling apart as Evergrande and now Kaisha Group are on the brink of default.
We’ve been warning about this for months and even years. China’s property sector is a mess. Fortune Daily reports:
China’s property sector slid deeper into financial distress this week as two of the nation’s largest housing developers appeared to miss key payment deadlines for millions of dollars owed to global bondholders. Both companies—China Evergrande Group and Kaisha Group Holdings—are near the brink of default, but the latter looks like it has the better shot at a possible turnaround.
On Monday, Evergrande, China’s most indebted property developer with bills totaling more than $300 billion, reached the end of a 30-day grace period for $82.5 million in interest it failed to pay to overseas bondholders last month. The day came and went without an announcement from Evergrande which, in a statement Friday, acknowledged that it might not be able to cover the interest payments—and disclosed a further $260 million in overdue debts. Evergrande’s investors said Tuesday they had not received the interest payments.
CNBC had Teresa Kong of Matthews Asia on to discuss Evergrande, Kaisha Group, and the sector. Ms. Kong shared Chinese talking points that the sector is strong and essentially will be protected by the government.
We’ve warned for months and years that the Chinese economy is unstable due to its overbuilding of property across the country. Will this finally hit or will be pushed off some more?
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