China Evergrande Group's crisis deepens as it defaults on debt payments again

Recently CNN.co.jp reported the following:

中国恒大集団の危機、深まる　債務支払いを再び不履行

2023.09.27 Wed posted at 10:33 JST

香港（ＣＮＮ） 経営再建中の中国不動産大手、中国恒大集団の本土部門、恒大地産集団は２５日、４０億元（約８１５億円）の元本と利息の支払いを履行しなかった。深圳証券取引所への提出書類で明らかとなった。中国不動産危機の震源地である同社の先行きに疑念が増している。

恒大集団は６月末時点で３２８０億ドル（約４９兆円）の負債を抱える。最初に不履行を起こしたのが２０２１年で、その後中国の不動産市場全体に危機が波及した。

同社は２４日、恒大地産集団への当局の捜査が原因で債務再編の取り組みに支障が出ていると報告し、投資家の懸念が高まっていた。恒大集団によると、同社金融部門への刑事捜査が進められており、同社が巨額の債務再編を完遂できるのか疑念が増している。

恒大集団の株価は２６日、前日比７％安となった。２５日には２２％安を記録していた。他の不動産開発企業も軒並み株価が下落している。

同社の債務再編が失敗し、海外の債権者と新たな合意が成立しなければ、会社が清算される可能性もある。無秩序に同社が倒産した場合、長年不動産市場に成長を依存してきた中国経済にさらなる損失を与えうる。

ＳＰＩアセットマネジメントのスティーブン・イネス氏は、中国経済の安定性に対する懸念が再び出ていると指摘する。

「同国の不動産市場は改善の兆候ではなく悪化していて、金融安定性のリスクが増しているとの懸念に再び火が付いている」（イネス氏）

同氏はさらに、中国当局が経済全体を支えるのに十分な措置をとるのか、不安感が増しているとも言及。政府の優先事項は単純な経済成長の追求から技術の自己完結性や金融安定性へとシフトし、「優先事項の組み合わせの変化が中国当局により複雑で微妙なバランスの行動をもたらす」との見方を示す。

恒大集団は２４日、恒大地産集団への捜査が原因で新たな債券発行が出来ないと発表、投資家を驚かせた。中国の証券当局は先月、恒大地産集団が投資家への情報開示での法令違反をした疑いで捜査を開始したという。

中国警察は今月、恒大集団が投資家への償還を実施しなかった後に資産運用部門のスタッフ数人を拘束。同社が２年前に債務危機に見舞われて以来、初の刑事捜査となった。

Translation

Hong Kong (CNN) On the 25th, Evergrande Group being the mainland division of China Evergrande Group and as a major Chinese real estate company undergoing restructuring, defaulted on principal and interest payments up to 4 billion yuan (approximately 81.5 billion yen). This was revealed in a filing with the Shenzhen Stock Exchange. There were growing doubts about the future of the company, which was at the epicenter of China's real estate crisis.

Evergrande Group had debts of $328 billion (approximately 49 trillion yen) as of the end of June. The first default occurred in 2021, after which the crisis spread throughout China's real estate market.

On the 24th, the company reported that its debt restructuring efforts were being hampered due to the authorities' investigation into Evergrande, raising investor concerns. According to Evergrande Group, a criminal investigation into its financial division was underway, raising doubts about whether the company could be able to complete its massive debt restructuring.

On the 26th Evergrande Group's stock price fell 7% from the previous day. It had fallen 22% on the 25th. Stock prices of other real estate development companies had also fallen across the board.

If the company's debt restructuring failed and a new agreement could not be reached with overseas creditors, the company could be liquidated. If the company went bankrupt in a chaotic manner, it could cause further damage to the Chinese economy, which had long relied on the real estate market for growth.

Stephen Innes of SPI Asset Management pointed out that there were renewed concerns about the stability of China's economy.

"The country's real estate market is deteriorating rather than improving, reigniting concerns that financial stability risks are increasing." (Innes said)

He also said there was growing uncertainty about whether Chinese authorities would take enough measures to support the economy as a whole. The government's priorities had shifted from the pursuit of simple economic growth to technological self-sufficiency and financial stability; he held the view that ``the changing mix of priorities will lead to more complex and delicate balancing acts on the part of Chinese authorities.''.

On the 24th, Evergrande Group surprised investors by announcing that it would not be able to issue new bonds due to the investigation into Evergrande Local Products Group. Last month, Chinese securities authorities began investigating Evergrande Group for allegedly violating laws and regulations in disclosing information to investors.

This month, Chinese police detained several staff members of Evergrande Group's asset management division after the company failed to make refunds to investors. This was the first criminal investigation since the company was hit by a debt crisis two years ago.

So, Evergrande Group reported that its debt restructuring efforts were being hampered due to the authorities' investigation into Evergrande, raising doubts about whether the company will be able to complete its massive debt restructuring.  If the company goes bankrupt in a chaotic manner, it could cause further damage to the Chinese economy, which has long relied on the real estate market for growth. On expert suspects that the China’s priorities have shifted from the pursuit of simple economic growth to technological self-sufficiency and financial stability that will require more complex and delicate balancing acts on the part of Chinese authorities. Let's wait and see whether China will achieve its goals.