|Construction cranes stand near the Evergrande name and logo at its new housing development in Beijing, on Sep 15, 2021. (Photo by= AP Photo/Andy Wong)|
[Asia News = Reporter Reakkana] BEIJING: Debt-mired developer Evergrande is struggling to appease angry homebuyers and investors knocking on its doors for cash taken as deposits for unbuilt homes and promised yields, AFP reported.
Steel-factory worker Xu Jiayin starts Evergrande, targeting millions of middle-class Chinese climbing onto the property ladder across the rapidly urbanizing country. After going public in 2009, Evergrande takes control of Chinese Super League club Guangzhou, renaming Guangzhou Evergrande and spends billions of dollars on foreign players, helping it to win a succession of titles. The company also moves into the dairy, grain, and oil businesses and later tries to build an electric car, kicking off a debt-fuelled spending spree.
However, in November 2018, the first signs of trouble emerged when China's central bank added Evergrande to its list of highly indebted conglomerates to watch, flagging that a potential collapse could cause systemic risks. Evergrande sells 28 percent of its property management unit for US$3 billion and starts offloading properties at increasingly steep discounts. As part of a crackdown on the property sector, regulators ban the controversial practice of taking deposits from homeowners before a house is completed. The company says in a stock market filing that its total liabilities have swelled to 1.97 trillion yuan and that it is facing the "risks of defaults on borrowings".