China’s ‘Lehman Moment’ – The Black Swan Has Landed: Evergrande Hires Bankruptcy Advisors As Furious Investors Protest Imminent Default

Sharing is Caring!

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.

See also  China’s growing property crisis: a look onto a few spill over scenarios
See also  China is selling its strategic oil reserves to bail out its sinking economy

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.

www.zerohedge.com/markets/endgame-begins-evergrande-hires-bankruptcy-advisors-furious-investors-protest-imminent

h/t LoneStarRising

419 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.