China megadeveloper lurches further into crisis

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Evergrande should perhaps be rebranded Lessgrande. As it lurches daily from one debt crisis to the next, it is shrinking at a marvelous rate. Bloomie:

  • Total borrowings fell 15% from March to $88bn by cutting land buys, doing fire sales and selling businesses.
  • EGR needs to cut debt to $54bn by 2023 to meet the three red-lines policy.
  • 2025 dollar bonds sank to 67 cent on the dollar and liquidity is clearly fragile.
  • Some home buyers are upset and demanding refunds as EGR discounts itself to deleveraging.

Bloody shaky seems about the right description for that plan. Moreover:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.