Rescue 'last resort for Evergrande'

Indebted Evergrande Group's (3333) business may be taken over by local governments and large state-owned developers on a regional basis, but this complex rescue will be the last resort, the Financial Times reported, quoting two senior executives. Banks must extend the...

Reuters and staff reporter

Tuesday, September 21, 2021

Indebted Evergrande Group's (3333) business may be taken over by local governments and large state-owned developers on a regional basis, but this complex rescue will be the last resort, the Financial Times reported, quoting two senior executives.

Banks must extend the terms of its loans, otherwise it will go bankrupt immediately, one of the executives said.

Its shares plunged up to19 percent to the lowest in over 11 years as a deadline for payment obligations fast approaches this week. They ended 10.2 percent down at HK$2.28.

Its property management unit Evergrande Property Services Group (6666) fell 11.3 percent, while its electric car unit China Evergrande New Energy Vehicle Group (0708) declined 2.7 percent. Its majority-owned movie streaming firm Hengten Net (0136) plunged 9.5 percent.

Banks with exposure to Evergrande fell.

China Merchants Bank (3968) was the worst performer yesterday, with its share tumbling 9.38 percent, followed by a 5.9 percent drop for China Minsheng Banking (1988). China CITIC Bank Corp (0998) also saw a 5 percent fall.