Evergrande, China’s beleaguered property developer, is attempting to pay its bills using parking spaces.
Protesters gathered for the third day in a row outside the offices of Evergrande, the teetering developer, after a firm offer of property and parking spaces instead of cash enraged already irritated investors.
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.
According to experts, the Hong Kong-listed developer has more than a million units pre-paid but not yet built, adding to the fear among Chinese investors, many of whom are first-time purchasers attempting to acquire a foothold in the country’s raging real estate market.
The corporation admitted on Tuesday that it is under “extreme strain” and may be unable to meet its obligations.
On Wednesday, over 60 protestors returned to the Shenzhen headquarters, with more expected later in the day to demand their money back from a privately held company whose quick expansion into 280 Chinese cities had tarnished its image.
“Evergrande, give us our money back,” they chanted briefly as they surrounded a man who appeared to be a corporate representative.
They were welcomed by a large police presence but refused to disperse, especially after Evergrande’s apparent attempt overnight to refund debts by promising property, parking places, and store units worsened the mood.
“They promised us businesses, kindergartens, and parking spaces… yet we are unable to take advantage of them. “None of us approve to this,” claimed a lady who only revealed her surname as Wang and her Chongqing banking firm is “not really functioning” due to outstanding developer obligations.
“They’re attempting to deal with their problematic properties,” another investor, who did not want to be identified, told AFP.
“However, they are unable to market these products.”
A woman sat crying on the floor in front of the offices on Wednesday morning, while police officers stood guard nearby and shooed media away.
Unpaid suppliers, some of whom claim to be owed upwards of $1 million in Shenzhen, as well as investors who rely on profits to pay off their own loans and staff wages, are becoming increasingly despondent.
Evergrande’s rapid expansion was aided by the massive debt mountain, which began during the 1990s housing boom and continued until Beijing introduced “three red lines” in 2020 to limit leveraged growth.
However, there are serious concerns regarding the implications of Evergrande’s debt on the. Brief News from Washington Newsday.