The Evergrande house of cards collapses

Evergrande's multi-billion dollar house of cards is about to collapse. The administration in Beijing would like to avoid this, a reconstruction would be the better solution. It is questionable whether it will succeed. The bubble is collapsing across the country and more property developers are heading for difficulties. It is difficult to quantify the risks. Even with the Evergrande Group, the amount of actual debt is not clear. A team of experts is now scouring the assets on instructions from Beijing after the company is unable to get the crisis under control on its own.

Hengchi 5 on a test drive
Hengchi 5 on a test drive

The most important events from a (predominantly) automotive point of view. Evergrande Auto (HK 0708) stock lost nearly a quarter of its value yesterday. The biggest loss in the day in recent times and near a collapse. The price recovered somewhat today, gaining more than 2% and trading at almost HKD 4 (€ 0,44).

However, a trend reversal is not in sight. One thing is certain, Evergrande will be in the coming days Payment deadlines to let sth. pass. US $ 84 million would have to be serviced on September 23, with no cash available. Chinese media report of 1,5 million buyers who have paid for their homes or have paid in full, but who are still waiting for Evergrande to start construction. Mass protests broke out in Shenzhen today, with pictures and videos on social media showing protesters in front of the Evergrande buildings.

The founder's luxury life

Meanwhile, the press takes on the luxury life of the Evergrande founder. A remarkable process that would have been unthinkable a few weeks ago. It allows conclusions to be drawn about the possible (social) crash of Hui Ka Yan. Two luxury villas in the very best Hong Kong location are ascribed to him. They belong to an Evergrande company, which is headed by the family butler as managing director.

The rent of each luxury villa is the equivalent of € 65.000 per month and the houses should have a combined value of US $ 200 million. Hong Kong is one of the most expensive cities in the world, but the population in general is less representative.

Waiting for investors

Evergrande is still in talks with potential buyers and investors. The question of whether the Hengchi brand will survive or not is open. Maybe that is also uninteresting. Likewise, the question of whether Evergrande Auto will continue to exist. The only thing that matters is what happens to the billions in investment. Also from our point of view. Because large parts of the European supplier structure are involved in the project.

You could easily stick another trademark on the cars themselves. Nobody would mind. It is noticeable that more and more vehicles have been spotted on test drives in China in the last few days.

A signal for investors or buyers? Obviously, because at least one vehicle from Evergrande Auto should be ready to get into that Production to go.

Depression in Trollhättan

The press reports about NEVS and the thin thread, on which the fate of the company depends, philosophizes. In any case, the impressions on site are depressing. A friend drove his electric car (which is not from NEVS) through Stallbacka on Monday on the way to Gothenburg.

Trollhättan in the rain, gray on gray, can alone be a reason for depression. Empty parking lots and abandoned buildings in the early afternoon are also common. He reported that he had never seen the former Saab site so desolate in recent years.

Only the security guards do their laps lonely. Is it over in Sweden again?

One thought on "The Evergrande house of cards collapses"

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    Auto & Real Estate

    Okay, they're both called Evergrande, but they're separate in the stock market. I am amazed that in the media, public and politically, despite two different business fields that could hardly be more contradicting, they are apparently understood as a disastrous unit ...

    Must have something to do with ownership and ownership, right?

    If I'm right, the Chinese oligarchs would have been well advised to at least pretend to spread their shares a little wider. And one almost develops a certain sympathy with the people-despising Communist Party for the fact that they do not allow everything in China, just because it might serve national pride.

    It is decidedly too far for me how the West sometimes courted its own oligarchs. Just today, € 120 million in funding for Elon Musk was decided. What for?
    If you have already cleared forests without a building permit and are building a factory in Germany, you don't have to use a turbo blower after construction has started ...
    (You know. Something with sugar in a lingually nasty combination.)

    It's all so superfluous and really not worthy of a democracy, I think.

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