Monday, December 6th, 2021
Problems in the real estate sector
Another group from China cannot pay
After the mega-corporation Evergrande and its rival Kaisa, another Chinese real estate company is experiencing financial bottlenecks. Sunshine 100 China Holdings is unable to meet a repayment deadline. The company is a smaller player, but the next with problems.
After the Evergrande mega-corporation, another Chinese real estate developer has admitted problems servicing a large loan. In a statement addressed to the Hong Kong stock exchange, the company Sunshine 100 China Holdings announced that it had to allow a repayment period of around 170 million dollars (around 150 million euros) plus interest to elapse the day before.
The background is “liquidity problems” caused by “unfavorable effects of several factors, including the macroeconomic environment and the real estate market,” said Sunshine 100 China Holdings. Talks with creditors about debt rescheduling or other solutions are ongoing, the company added.
Sunshine 100 has already had problems servicing its loans on time in the past. According to a calculation by financial news agency Bloomberg, the company is now in arrears with $ 385 million.
Evergrande founder has to present himself
Sunshine 100 is not one of the major corporations in China. However, the company’s problems are an expression of the crisis that the Chinese real estate industry is currently experiencing. At the center of the crisis is Evergrande, the country’s largest developer. On Friday, the completely over-indebted group had again warned of a default, company founder Xu Jianyin was then called in by the government of the Guangdong province, where Evergrande is based.
After years of credit-funded expansion, Evergrande is sitting on a mountain of debt worth the equivalent of around 260 billion euros and has great difficulty servicing its loans. A subsidiary of Evergrande would have to pay $ 82.5 million by this Monday, according to Bloomberg. The important Evergrande rival Kaisa is also threatened with bankruptcy.
Evergrande’s share price fell 19.6 percent by the time the Hong Kong market closed on Monday. The Sunshine 100 share collapsed by more than 14 percent by the end of the market.