Evergrande, China’s beleaguered property developer, is attempting to pay its bills using parking spaces.
On Wednesday, protests against teetering developer Evergrande extended to several Chinese cities after investors rejected the company’s offer of property and parking spaces in lieu of cash repayments of its obligations.
The struggling real estate giant has warned that it may not be able to service its massive debts of more than $300 billion, causing alarm among property buyers, bond holders, and contractors, as well as fears of a default that might spread throughout the world’s second-largest economy.
Several hundred protestors returned to the company’s headquarters in Shenzhen, China’s southern city, for the third day in a row. The company began its ascension into a sprawling multinational minting the aspirations of home ownership among China’s middle classes in 1996.
They were met with a significant police presence but refused to disperse, chanting “Evergrande, give us our money back.”
The new protest started after Evergrande’s apparent attempt overnight to refund debts by promising land, parking spaces, and storage units soured the atmosphere.
“They offered us (business) ownership, kindergartens, and parking spaces… yet we are unable to use them. “None of us agree,” remarked a woman who only supplied her last name as Wang.
Because of the developer’s outstanding obligations, she claims her finance firm in Chongqing’s center city is “not actually working.”
Experts estimate that the Hong Kong-listed company has over a million units pre-paid by clients that have yet to be built, adding to the fear among Chinese investors, many of whom are first-time purchasers attempting to acquire a foothold in the raging property market.
The corporation admitted on Tuesday that it is under “extreme strain” and may be unable to meet its obligations.
It turned down an AFP request for comment on Wednesday.
The privately held company, whose quick development into 280 Chinese towns had boosted its reputation, now appears to be on the verge of collapsing, but experts say Beijing will not allow it to do so in a disorderly manner.
Anxious investors gathered outside firm offices in Taizhou city in eastern Jiangsu province on Wednesday morning, while similar protests were reported in Anhui and unpaid workers demanded their salaries in Ezhou city, Hubei.
Unpaid suppliers, some of whom claim to be owed upwards of $1 million in Shenzhen, are growing concerned, as are investors who rely on profits to pay off their own loans and employee salaries.
A woman sat wailing on the floor in front of the Shenzhen headquarters on Wednesday morning, while six officers kept guard. Brief News from Washington Newsday.