Endgame Begins: Evergrande Hires Bankruptcy Advisors As Furious Investors Protest Imminent Default

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Endgame Begins: Evergrande Hires Bankruptcy Advisors As Furious Investors Protest Imminent Default

It took Evergrande less than a day to go from denying “rumors” of bankruptcy (as per a statement posted on its website earlier today), to confirming that a bankruptcy is imminent.

In a filing on the Hong Kong stock exchange on Tuesday, Evergrande which was busy trying to convince angry Chinese mobs that they will get their money and/or apartments and that it has no plans of default, the company all but conceded that a bankruptcy is imminent when it said it has hired notable bankruptcy advisors Houlihan Lokey and Admiralty Harbour Capital as joint FAs to “assess the firm’s capital structure”, a well-known euphemism of “prepare to file for bankruptcy.” And just so there was no doubt as to what is coming next, the company said if it’s unable to repay debts on time or get creditors to agree to extensions or alternative arrangements, it may lead to cross-default.

It quickly went downhill from there, with the company saying that it expects “significant continuing decline” in contract sales in September, resulting in “continuous deterioration” of cash collection, according to the statement. That will place “tremendous pressure” on the group’s cashflow and liquidity.

Finally, guaranteeing that a default is just a matter of days if not less, the company admitted that it has failed to make “material progress” on the sale of stakes in China Evergrande New Energy Vehicle Group Ltd. and Evergrande Property Services Group Ltd., while the sale of its office building in Hong Kong hasn’t been completed within the expected timetable.

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In short a total disaster, and all this is happening a tens of thousands of Chinese are starting to feel insurrectiony – the real thing, not that January 6 tourist trap – and if they suffer losses, and in a company with $300BN in debt they will suffer major losses, their protests which have been largely peaceful to date will turn quite violent.

As we reported this morning, police descended on Evergrande’s Shenzhen headquarters late Monday after dozens of people gathered to demand repayments on overdue wealth management products. Protesters numbered in the hundreds on Sunday, Caixin reported. In addition to equity investors who are about to lose everything, the company is also facing angry homebuyers, creditors and even its own employees… who are also about …read more

Source:: Zerohedge.com

      

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