Evergrande shares resumed trading today, after a deal was agreed by Evergrande to sell a controlling stake its property services division for $2.6bn. The deal fell through and Evergrande shares dropped another 14%
They've lost 80% of their value this year.
The company was given a month 'grace period' to make interest payments (in the $billions) due on the debt to it's creditors, and this runs out on Saturday.
Its overall debt in is excess of $300bn (2% of China's entire GDP)
Two smaller real estate companies in China have already gone *pop* this month, but Evergrande dwarfs them.
Globally, there's almost 300 banks and financial institutions that have lent to Evergrande, as well as investors from not just China but around the world who have shareholdings. Then there's the huge number of trade creditors, collectively owed $billions.
Interesting to note that the company was incorporated in the Cayman Isles, where its parent company is still located. I'm guessing the paper shredders are currently running on overtime in Georgetown.
The CCP has told Evergrande not to default, but without the state stepping in, experts think it's inevitable.
If Evergrande were to fail, it would be catastrophic within China - but also send huge economic ripples around the world, perhaps even leading to another credit crunch (although every likely not as substantial as the 2008/9 GFC)
There's a simple summary of the situation here:
https://www.bbc.co.uk/news/business-58976991
