Experts point out reasons such as sales decline, high risk business model and Chinese’s government crackdown to control housing market rise led Evergrande into crisis.
Beijing: Chinese’s country top real estate body is planning to hold a meeting on Friday amid the debt crisis at Evergrande to resolve the issues of the housing market in China. The situation has affected the Chinese’s real estate market badly.
The meeting will commence on Friday by the China Real Estate Association in the capital city of Beijing to resolve issues faced by real estate companies in the country, a source report to Global Times on the matter.
According to the Chinese media, the meeting will be attended by high-level executives from the housing market to resolve the issues faced by the Chinese housing market.
The pressure on the Chinese housing economy led the bank and research organization to cut the country’s growth. The crisis got worldwide attention when Evergrande Real Estate Group went into the debt crisis.
Evergrande, the second-biggest real estate developer in China, is currently a debt-ridden company.
The developer has a total debt of USD 380 billion which it took from banks, along with liabilities to contractors and suppliers. Experts believe various reasons such as sales decline, high-risk business model and Chinese’s government crackdown to control housing market rise led Evergrande into crisis.
As the property developer Evergrande fails to pay loan repayment, another developer Modern Land is also struggling to pay its loans.
Jill Disis from Hong Kong Stock Exchange said CNN that Modern Land asked the investors for more time to pay a USD 250 million bond which is due on October 25. Modern Land said it wants the deadline to extend till January 2022 to make sure it has enough liquidity and cash flow management so that it can avoid any payment defaults, wrote Disis.
In a separate regulatory filing, the company said Chairman Zhang Lei and President Zhang Peng will provide USD 124 million in loans to support the company.
Published by– ANI
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