April 13, 2024

Shiv Telegram Media: Evergrande, Chinese property developer, reports $81 billion loss in two years – CNBC

China’s struggling property developer, China Evergrande Group, has revealed a staggering loss of $81 billion in its long-delayed earnings report. The company, which is known for being the most indebted property developer worldwide, fell into default last year and announced an offshore debt restructuring program in March. This move came as the company faced increasing struggles in completing projects and repaying suppliers and lenders.

According to the earnings report, Evergrande recorded net losses of 476 billion yuan ($66.36 billion) in 2021 and an additional 105.9 billion yuan ($14.76 billion) in 2022. These losses were primarily attributed to writedowns of properties, return of lands, losses on financial assets, and financing costs. This is a significant decline from the net profit of 8.1 billion yuan reported in 2020.

The colossal debt pile of Evergrande has raised concerns about the stability of China’s property sector, which is a crucial part of the country’s economy. Defaults and abandoned property projects have become widespread across the nation, highlighting the far-reaching impact of Evergrande’s financial troubles. This has led to increased anxiety and uncertainty in the market.

To address its dire financial situation, Evergrande has proposed a restructuring plan that is set to be heard at the High Court on July 24. This further underscores the severity of the company’s predicament and the urgent need for a solution.

The news of Evergrande’s massive losses has sent shockwaves through the financial world, with experts closely monitoring the developments. Many fear that if the company fails to come up with a viable rescue plan, it could have severe repercussions for the Chinese economy as a whole. The fallout from Evergrande’s struggles is likely to be felt not only by its employees, suppliers, and lenders but also by the broader property market and investors at large.

As the situation unfolds, all eyes are on the upcoming court hearing and the subsequent decisions that will be made. The fate of China Evergrande Group hangs in the balance, and the repercussions of its struggles will undoubtedly reverberate throughout the global economy.