HONG KONG (Reuters) – Debt-ridden property developer Evergrande Group missed a dollar bond interest payment deadline, moving closing to a potential default and fuelling worries that a collapse could send shockwaves through China’s economy and beyond.
Here is a timeline of events leading to Evergrande’s debt problems and what the developer has done to raise funds so far:
August 2017
Evergrande vows to cut debt for the first time, aiming to slash net gearing ratio to 70% by June 2020 from 240% in June 2017.
November 2018
Central bank names Evergrande as one of few financial holding conglomerates on its watch that it said could cause systemic risk.
March 2020
Evergrande targets cutting its debt by 150 billion yuan ($23.3 billion) annually for three years.
August 2020
Regulators meet with 12 major property developers, including Evergrande, to introduce caps for three different debt ratios in a pilot scheme dubbed “the three red lines”.
Evergrande sells 28% of its property management unit for $3 billion ahead of the unit’s initial public offering (IPO).
It asks Guangdong’s provincial government to approve a Shenzhen backdoor listing plan that has languished for four years, saying it could face a cash crunch.
September 2020
Company offers 30% discount on properties for a month to push sales.
October 2020
Evergrande raises $555 million in a slimmed-down secondary share sale in Hong Kong.
November 2020
It terminates the Shenzhen backdoor listing plan. Some strategic investors agree not to demand repayment.
Evergrande Property Services Group Ltd’s Hong Kong IPO raises $1.8 billion.
January 2021
China Evergrande New Energy Vehicle Group Ltd raises $3.4 billion by bringing in six new investors.
March 2021
Evergrande sells 10% of online real estate and automobile marketplace Fangchebao to 17 investors for $2.10 billion in a pre-IPO deal.
It aims to meet all three caps on debt ratios by 2022-end. It plans to list Fangchebao by early next year, and spin off its water and tourism units among others.
June 2021
Evergrande says it will sell over half of its 58% stake in peer China Calxon Group Co Ltd, worth $386 million.
Fitch downgrades Evergrande to ‘B’ from ‘B+’ with a negative outlook.
The developer arranges HK$13.6 billion ($1.75 billion) to repay a maturing bond and interest on all other dollar bonds, and says it will have no further bonds due before next March.
Evergrande achieves one of regulators’ debt ratio caps by cutting interest-bearing debt to around 570 billion yuan from 716.5 billion yuan six months earlier.
July 2021
A court orders a freeze on a 132 million yuan bank deposit held by Evergrande at the request of China Guangfa Bank Co Ltd. Evergrande says the loan is not due until March and it plans to take legal action.
Some banks in Hong Kong decline to extend new loans to buyers of two of Evergrande’s uncompleted residential projects.
Evergrande scraps a special dividend proposal. S&P cuts its credit rating on the company by two notches to B- from B+ with a negative outlook.
Fitch downgrades Evergrande to “CCC+” from “B”.
August 2021
Evergrande agrees to sell stakes in internet unit HengTen Networks Group Ltd worth a total of HK$3.25 billion ($417.5 million).
Moody’s downgrades Evergrande’s corporate family rating (CFR) by two notches to “Caa1” from “B2”.
Legal sources say lawsuits against Evergrande across the country will be centrally handled by the Guangzhou Intermediate People’s Court.
S&P downgrades Evergrande again by two notches to “CCC” from “B-“.
The company says it is in talks to sell certain assets, included stakes in Evergrande New Energy Vehicle and Evergrande Property Services.
State media reports construction work has been halted on two Evergrande projects in Kunming, one of them for overdue payments. The other was scheduled to be delivered to homebuyers in October.
Hui Ka Yan steps down as chairman of flagship unit Hengda Real Estate Group which Evergrande says is due to the termination of its backdoor listing plan.
China’s central bank and banking watchdog summon senior executives and issues a rare warning that Evergrande needs to reduce its debt risk and prioritise stability.
Evergrande warns of liquidity and default risks if it fails to resume construction, dispose of more assets and renew loans, as it reports a 29%year-on-year decline in net profit.
September 2021
Chairman Hui Ka Yan leads a pledge-signing ceremony to promise buyers it will complete construction of their homes.
China Chengxin International Credit Rating Co (CCXI) downgrades Evergrande and its onshore bonds to “AA” from “AAA”, erasing the bonds’ value for use in pledged repo trading as a result.
Moody’s downgrades the corporate family rating (CFR) of China Evergrande to “Ca” from “Caa1”, with a negative outlook.
Fitch downgrades Evergrande to “CC” from “CCC+”, flagging a “probable” default.
Evergrande requests extension on trust loan interest payments to creditors including CITIC Trust.
Chairman Hui vows in a forum to repay all of its matured wealth management products as soon as possible.
Investors crowd the lobby of Evergrande’s Shenzhen headquarters to demand repayment of loans.
Evergrande says online speculation about bankruptcy and restructuring was “totally untrue”, but adds it faced “unprecedented difficulties”.
Evergrande says it has engaged financial advisers to examine its financial options and warned of cross-default risks amid plunging property sales.
A local government in China’s Anhui province cancels a contract of land site use with a subsidiary of China Evergrande because the latter failed to make payment for the site.
Hui says he will make it a top priority to help retail investors redeem investment products.
Evergrande said it had “resolved” a coupon payment on an onshore bond, but a Sept.23 deadline for paying $83.5 million in interest on a dollar bond passed without bondholders being paid or hearing from the company, two sources said.
($1 = 6.4451 Chinese yuan)
($1 = 7.7842 Hong Kong dollars)
(Reporting by Clare Jim; Editing by Sumeet Chatterjee, Stephen Coates and Edwina Gibbs)
