This was the rise and fall of Evergrande, the Chinese real estate giant | Economy

Drowning in debt and unable to reassure angry investors and clients, the Chinese real estate giant Evergrande It resumed its listing on the Hong Kong stock exchange on Thursday with significant losses.

Fears of an imminent collapse of the group and its impact on the Chinese economy have rocked the markets.

Here is a summary of the rise and subsequent fall from Evergrande:

1996: The dream begins

Steel mill employee Xu Jiayin founds Evergrande in a rapidly urbanizing country with millions of new middle-class homes entering the property market.

2009-10: Expansion begins

In 2009 it was listed on the Hong Kong stock exchange and a year later it took over the Guangzhou football club, renamed Guangzhou Evergrande. The group spends fortunes on foreign stars and wins nine of ten Chinese Super League titles.

The company enters the dairy, grain and oil business, and then tries to produce electric cars, initiating a spiral of heavy indebtedness.

2017: Richest Man in Asia

Xu becomes the richest man in Asia with a fortune valued at 43,000 million dollars.

2018: The Central Bank warns

In November the first warning signs appear. The central bank includes the conglomerate on its list of highly indebted companies to watch, warning that a potential collapse could carry systemic risks.

August 2020: “Three red lines”

Regulators announce new limitations on three debt ratios, the “three red lines”, in order to reduce the leverage of the real estate sector.

Evergrande sells 28% of its property management unit for $ 3 billion and begins to divest itself of deeply discounted properties.

June 2021: Deposit limits

In their realignment of the industry, regulators curb the practice of collecting deposits from prospective buyers before the property is finished, a major source of funding for developers.

With the new rules, local governments put a limit on deposits, retain them and deliver them in installments to developers after reviewing the progress of the projects.

Capital Economics firm estimates that Evergrande has more than $ 207 billion in pre-sale commitments at the end of June tied to 1.4 million homes it must build.

August 2021: Legal battles

An advertiser denounces the company for unpaid fees, the first in a series of similar actions by nervous subcontractors. The works of several projects are paralyzed.

Debt rating companies such as Fitch, Moody’s or S&P downgrade Evergrande’s rating, making it difficult for the group to get new loans and fueling bankruptcy fears.

Evergrande acknowledges that its debts exceed $ 305 billion and that it faces “risks of default.”

September 2021: Protests

Uncertainty about the future of the giant is growing, which admits to being under “tremendous pressure”, in part due to negative media coverage.

Investors, business partners and buyers organize rare public protests outside the company’s headquarters in Shenzhen (south) and other Chinese cities.

October 2021: Stocks plunge

Evergrande, which has already defaulted on some refunds, suspends its listing on the Hong Kong stock exchange on October 4 pending an announcement of a “major transaction.”

Two and a half weeks later, on October 21, its securities were listed again and registered a 10% drop at the opening.

Hours earlier, the group had announced the collapse of the operation to sell its property services unit for $ 2.58 billion.

In mid-October, the Chinese central bank assured that the risks linked to an Evergrande crisis were “controllable”.

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