Chinese Investors Expect Collapse After ‘Evergrande Denies Bankrupt Rumours’ Trends On Weibo
Facing USD 305 billion liabilities and mounting protests, China Evergrande [
China’s government has sent additional financial advisers and accountants to assist the group’s restructuring, people familiar with the matter told Bloomberg, but even the group itself warned the public about its languishing financial situation.
According to the group’s exchange filings on Tuesday, the company recorded a ‘significant continuing decline in contract sales’ in September, a month in which real estate companies typically record higher contract sales in China. The contract sales recorded a consecutive decline in the past three months, from CNY 71.63 billion in June to CNY 38.08 billion in August.
The company suggested negative media reports have undermined potential buyers’ confidence. Expecting a continual decline in sales this month, they foresee the cash collection would deteriorate thus adding more pressure on its cash flow and liquidity.
Meanwhile, two of its subsidiaries failed to discharge their guarantee obligations for the wealth management products issued by third parties which is worth around CNY 934 million. The statement suggested this could lead to ‘cross-default’ and a ‘material adverse effect’ on the Group’s prospects.
The group appointed Houlihan Lokey and Admiralty Harbour Capital as financial advisors to evaluate the liquidity and come up with an optimal solution for all stakeholders. But the effort did not receive appreciation from property buyers, investors and netizens.
A news video regarding the morning announcement on news video Weibo account ‘Zheng Guan Video’ received more than 3600 likes and around 500 comments. Popular comments mocked Evergrande’s statements as admitting the bankruptcy rumours.
“They are refuting rumours, that means it is true.” A user received 167 likes for the comment.
“Rumours online said the bankruptcy will be announced on 15th, I’ll wait for tomorrow.” Another comment was written with 167 likes.
Apparently some netizens were angered by Evergande’s approach along the way. “They even deceived their people, and still waited for the public and the authorities to reveal its inside stories after its bankruptcy,” the comment receiving 39 replies said.
Even pEven property buyers voiced their discontent. “Those of us who bought Evergrande off-plan properties were deceived in the worst way!”
The topic ‘Evergrande denies bankruptcy rumours’ ranked on #8 on Weibo hottest search on Tuesday morning with 109 discussions and more than 5.4 million views.
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