Evergrande

Chinese property giant Evergrande is just 48 hours away from potential collapse

PHOTO: Evergrande

  • A deal that could have saved Chinese property giant Evergrande fell through
  • Hong Kong-based Hopson Development Holdings pulled out of deal to buy asset 
  • Evergrande is $400billion in debt, has missed three annual interest deadlines 
  • 30-day grace period on this debt obligation to bondholders expires on Saturday 

China’s second biggest property developer Evergrande is on the verge of collapse after critical deal to stop a default fell through – and it could have major implications for Australia.

Evergrande Group

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The 25-year-old mega apartment developer has debts of more than $400billion and has during the past month missed three annual interest payment deadlines to bondholders.

A 30-day extension on an offshore debt servicing obligation expires on Saturday – the end of a grace period which kicked in late last month.

Now the company founded by billionaire Xu Jiayin could fold with Hong Kong-based Hopson Development Holdings pulling out of a $3.4billion deal to buy 50.1 per cent of Evergrande’s property services arm.

China's second biggest property developer Evergrande is on the verge of collapse after deal to delay a default fell through - with major implications for Australia (pictured is the Evergrande Centre in Shanghai)

China’s second biggest property developer Evergrande is on the verge of collapse after deal to delay a default fell through – with major implications for Australia (pictured is the Evergrande Centre in Shanghai)

Evergrande has admitted it would struggle to meet its debt repayment requirements, sparking fears of a default.

That would cause wider financial market problems in China, Australia’s biggest trading partner and the world’s second biggest economy.

‘There is no guarantee that the group will be able to meet its financial obligations,’ Evergrande told the Hong Kong stock exchange late on Wednesday night.

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