Evergrande warns of new liquidity risks due to a decline in property sales

Chinese property developer Evergrande, who has run into financial difficulties, warns of new liquidity risks due to a decline in property sales. The country's second largest real estate developer claims to be holding talks with potential investors to sell some of its assets and get some fresh money. However, no "significant progress" has been made so far, according to a filing on the Hong Kong stock exchange. The company blames "persistent negative media reports" for the deterioration in investor confidence, which leads to a further decline in sales in September. Overall, the real estate company should sit on a mountain of debt equivalent to more than $ 300 billion. Under the pressure of falling profits, the company is struggling to refinance loans. Evergrande does not have any bonds with a term until the end of 2021, but the rating agency Fitch estimates that the group will have to make interest payments on bonds of USD 129 million in September alone and USD 850 million before the end of the year. S&P Global estimates the debt Evergrande will have to repay next year at $ 37 billion. In June, Evergrande defaulted on bond interest payments. The lowering of the credit ratings by the rating agencies Moody's, Fitch and China Chengxin International (CCXI) had led to a sell-off on the bond and stock markets. Investors fear shock waves for the Chinese banking system if Evergrande collapses. According to industry observers, there are now clear signs that the authorities would intervene to avoid an implosion of Evergrande. The real estate market accounts for around a quarter of the Chinese economy. A lush flow of credit fueled the boom in the industry for years - and at rapidly rising prices. For months, the requirements for more and more branches of industry have been tightened in China - including the real estate sector. The regulator enacted hundreds of new rules and restricted borrowing and land purchases to cool the booming housing market. Not only prices came under pressure, so too did real estate companies. The real estate developer's share lost around 10 percent of its value in Hong Kong today, and has lost almost 75 percent since the beginning of the year. Disgruntled investors gathered in front of Evergrande's headquarters in Shenzhen on Monday to ask for their money back. The company had previously said it was in "unprecedented trouble" but denied speculation of impending bankruptcy. Around two weeks ago, the over-indebted group itself warned of liquidity and default risks if it were not able to resume construction, sell holdings and renew loans.