Yesterday was probably the blackest day so far in the current development around the Evergrande Group. Not only the shares of the Auto Division are in a nosedive. An Evergrande subsidiary's funds were frozen following a court order. It can hardly be assumed that the development will remain without further damage. For Trollhättan, too, the signs of concern are red.
Exacerbation of the crisis
The permanent one intensification The situation around the Evergrande Group was already the subject of a detailed article yesterday with background facts. The situation worsened on Monday.
A court in Jiangsu Province did so Freeze an account of the Evergrande daughter Hengda. In the past few months, Hengda Real Estate had repeatedly let deadlines for paying commercial invoices pass without making a payment. The Evergrande Group is said to have financed itself on the gray capital market with around US $ 200 billion, which is a thorn in Beijing's side. Yesterday the court froze a balance equivalent to US $ 20 million.
A heavy blow for Evergrande. Because the company is said to have never missed a payment date. The court's action increases pressure and further damages investor confidence in the group.
The sedative pill fails
Last Friday, Evergrande promised the visibly troubled investors a special payment as a sedative pill. In the meantime, however, it is clear that it will not be about paying out money. Evergande is considering paying shareholders with shares in other companies in the group. Shares in Evergrande Auto (HK 0708) would be possible. The stock market reacted immediately, the shares continued to plummet.
Evergrande shares on nosedive
To round off the day, the media made the accusation of a senior Evergrande manager in a Hong Kong court. It is about attempted rape and other misconduct.
The bundle of bad news sent stocks south as well. The automobile share (HK 0708) lost 19,10%, the notes of the parent company (HK 3333) were down 16,22% at the close of the stock exchange.
Yesterday will hardly be without consequences. Red lines have been crossed and Evergrande is obviously picking up speed to solve the problems. The initial public offering of the mineral water company is currently being prepared. In China is "Evergrande Spring”Known as“ Betonwasser ”, the parent company has a 49% stake. Now the shares in Hong Kong are to be listed on the stock exchange brought become. Evergrande expects this to generate revenues of some US $ 100 million. It remains to be seen whether this will be sufficient to solve the problem at hand.
What could happen to the European holdings of the Evergrande Group is also unclear. The Evergrande crisis will affect them too. What will be decisive will be what Beijing wishes for Evergrande in the future.
With images from Yahoo Finance and Evergrande Spring