Evergrande’s founder calls for a resumption of construction and sales.
According to state media, the CEO of teetering Chinese developer Evergrande has pushed employees to resume construction and sales in order to deliver properties, as the company fights to avert a collapse that many worry could send shockwaves through the world’s second largest economy.
As the developer drowns in a sea of debt worth more than $300 billion and tries to meet its obligations, enraged homebuyers and investors from around the country have congregated to demand payback.
The remarks come as the company is scheduled to pay interest to foreign investors on Thursday, with fears that it would miss the deadline, triggering a 30-day countdown to a default.
Xu Jiayin, the company’s founder and billionaire, summoned over 4,000 Evergrande executives to a meeting shortly before midnight on Wednesday, urging them to “dedicate all their energy to resuming work and production and ensuring that properties are delivered,” according to the state-owned China Securities Journal.
According to the Journal, he also stated that the group must “make every effort to fulfill” payment plans that the corporation had previously announced.
Previously, the privately held corporation attempted to repay some debts in kind, promising creditors such as suppliers, contractors, and investors wealth products, parking spaces, and commercial units in lieu of cash.
Xu committed to maintain a “very responsible approach toward investors” on Wednesday night.
According to the newspaper, he stated, “Only by completely resuming work and production, beginning sales, and resuming operations can the rights and interests of home buyers be protected, and smooth payment of investment goods buyers be secured.”
The crisis sent shivers through world markets on Monday, as traders feared that a collapse at one of China’s largest real estate enterprises would spill over into the economy and have terrible knock-on repercussions around the world, just as countries struggled to recover from the coronavirus outbreak.
Evergrande announced Wednesday that it had achieved an agreement with domestic bondholders to repay interest on their notes on Thursday, which alleviated some of their fears.
The tycoon’s comments came just days after he reportedly told colleagues that he believes the company would “walk out of the worst phase soon.”
As investors and suppliers demand their money back, Evergrande’s liquidity crisis has sparked public outrage and rare continuous protests outside company offices in China.
The company has acknowledged that it is experiencing “unprecedented challenges” and has warned that it may be unable to meet its obligations.