China Evergrande CEO Sold $56.5 Million of Bonds in Q3 2021 Before Bonds Default in December
12th February 2022 | Hong Kong
China Evergrande Vice-chairman and CEO Xia Haijun had sold $56.5 million of bonds in Q3 2021 (July & August), a few months before China Evergrande bond defaulted in December 2021. The par value of the bonds are $128 million, which were due in 2022, 2023 and 2025. The prices of the bonds were trading between $0.35 cents to $0.53 cents, 47% to 65% below par value ($1) when CEO Xia Haijun sold the bonds. After default in December 2021, the bonds traded below $0.20.
“ China Evergrande CEO Sold $56.5 Million of Bonds in Q3 2021 Before Bonds Default in December “
China Evergrande
China Evergrande, one of the largest property conglomerate in China which ha been preventing a default of interest payment of its $300 billion debt, has officially defaulted on its debt on missed interest payments and with top credit rating agency Fitch Ratings downgrading Evergrande’s rating in December 2021. An official default of China Evergrande means the company may not be able to restructure debt at a lower cost, and may trigger a widespread default and short-term pressure of property prices due to asset sale. China Evergrande is founded in 1996 by Hui Ka Yan (Xu Jiayin). In 2009, China Evergrande went public in Hong Kong. At one point, Hui Ka Yan had a personal fortune of more than $30 billion. In 2021, his personal fortune is estimated at around $7 billion to $11 billion.
China Evergrande is one of the largest property conglomerate in China with more than 1,300 real estate projects & 200,000 employees and business interests in electric cars, healthcare, consumer products etc, and has more than $300 billion of outstanding debts. China Evergrande is suffering from severe cashflow and little working capital, due to significant decline in property sales and obligations on interest payments.
Should China Evergrande defaults, the banking industry may start to face a loan write-down or lengthy recovery on their loans to China Evergrande, suppliers will receive an uncertain recovery, and homebuyers and investors will face uncertainties on their property purchase and investments.
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