Evergrande’s Total Liabilities Swell to Over $300 Billion

[Shotgunner51]

Foreign investors are being paid last anyhow.

First is employees, then homebuyers, then banks. Even if Evergrande goes down the hedge fund vultures take a massive haircut which is why they are making a huge deal out of this. If only Chinese were going to be hurt they'd celebrate it.

Exactly. I guess bond ratings already dropped to BB-/RR6 or something like that? Whatever it is seems like rating agencies already too late to react, again, massive haircut for bond holders is destined if bankruptcy is enforced now. Funds get burnt, game over for Xu Jiayin, unless he has more tricks under his sleeves.

 

[aziqbal]

Foreign investors are being paid last anyhow.

First is employees, then homebuyers, then banks. Even if Evergrande goes down the hedge fund vultures take a massive haircut which is why they are making a huge deal out of this. If only Chinese were going to be hurt they'd celebrate it.

like most things in China all this stuff is fake

UK built railways 200 years ago and they are still operational

Chinese railways wont last 20 years

 

[FairAndUnbiased]

like most things in China all this stuff is fake

UK built railways 200 years ago and they are still operational

Chinese railways wont last 20 years

I agree, India also has UK built railroads from 200 years ago still in operation.

 

[aziqbal]

I agree, India also has UK built railroads from 200 years ago still in operation.

yes I should have quoted that

 

[Shotgunner51]

The scale of the write downs needed to provide a true and fair representation was estimated by Hong Kong based accounting research firm GMT to be around $23 billion US.

Seems like before rating agencies like Fitch or S&P get summoned for some big questions, it's the auditor first get investigated. Faking audit report? Hong Kong’s peak financial audit regulator (Financial Reporting Council) is probing the audit of accounts carried out by PricewaterhouseCoopers (PwC, headquartered in New York US) who has never issued a warning to Evergrande.

Evergrande and its auditor are under investigation | Asia Markets

Hong Kong's peak financial audit regulator has announced it is investing going concern reporting of China Evergrande Group in its 2020 annual accounts and 2021 interim accounts.

www.asiamarkets.com

Evergrande Never Received a Warning From Its Auditor - SuccessDigest

Yet the property developer’s auditor gave it a clean bill of health in an annual report issued this spring. Now, Evergrande is teetering on the edge of financial collapse, weighed down by an $88.5 billion debt burden and total liabilities in excess of $300 billion. The company has hired...

successdigestonline.com

 

[patero]

Seems like before rating agencies like Fitch or S&P get summoned for some big questions, it's the auditor first get investigated. Faking audit report? Hong Kong’s peak financial audit regulator (Financial Reporting Council) is probing the audit of accounts carried out by PricewaterhouseCoopers (PwC, headquartered in New York US) who has never issued a warning to Evergrande.

Evergrande and its auditor are under investigation | Asia Markets

Hong Kong's peak financial audit regulator has announced it is investing going concern reporting of China Evergrande Group in its 2020 annual accounts and 2021 interim accounts.

www.asiamarkets.com

Evergrande Never Received a Warning From Its Auditor - SuccessDigest

Yet the property developer’s auditor gave it a clean bill of health in an annual report issued this spring. Now, Evergrande is teetering on the edge of financial collapse, weighed down by an $88.5 billion debt burden and total liabilities in excess of $300 billion. The company has hired...

successdigestonline.com

Yeah I was following the PWC audit controversy, that's going to have some interesting consequences.

It's still early days but q1 next year when more Evergrande bonds are maturing will give us a better picture of the situation, will central government continue to quietly prevent defaults? So far the interest payments have been managable, but given the size of the Bonds maturing next year how far will they go to prevent a collapse?

 

[Shotgunner51]

Yeah I was following the PWC audit controversy, that's going to have some interesting consequences.

It's still early days but q1 next year when more Evergrande bonds are maturing will give us a better picture of the situation, will central government continue to quietly prevent defaults? So far the interest payments have been managable, but given the size of the Bonds maturing next year how far will they go to prevent a collapse?

Xu Jiayin is like a villain if not enemy of central government, to which the utmost priority is social security like staff benefits, smooth deliveries to house buyers. The central government should so far be confident citing Evergrande's onshore assets are sufficient to cover those mentioned exposures, and for sure will continue to pressurize Xu Jiayin in delivering houses (保交楼) progressively. This process will naturally unload inventories and boost cashflow for deleveraging (repayment to bond holders), but central government wouldn't and can't care much about the offshore assets/liabilities.

Accounts of a listco are always far more complicated than it seems, you got auditor like PwC in this case, you got law firms, you got the i-banks selling bonds for you, even credit rating agencies like Fitch or S&P could've "indirectly" involved somehow, so it's entirely upto Xu Jiayin (and whoever is in the game) to save his HKEX-listed company from a potential bankruptcy, which may bury him, creditors and potentially more insiders. If you look at Enron you know how deep it can go, I don't think PwC wants to become another Ernst & Young.

 

[patero]

Xu Jiayin is like a villain if not enemy of central government, to which the utmost priority is social security like staff benefits, smooth deliveries to house buyers. The central government should so far be confident citing Evergrande's onshore assets are sufficient to cover those mentioned exposures, and for sure will continue to pressurize Xu Jiayin in delivering houses (保交楼) progressively. This process will naturally unload inventories and boost cashflow for deleveraging (repayment to bond holders), but central government wouldn't and can't care much about the offshore assets/liabilities.

Accounts of a listco are always far more complicated than it seems, you got auditor like PwC in this case, you got law firms, you got the i-banks selling bonds for you, even credit rating agencies like Fitch or S&P could've "indirectly" involved somehow, so it's entirely upto Xu Jiayin (and whoever is in the game) to save his HKEX-listed company from a potential bankruptcy, which may bury him, creditors and potentially more insiders. If you look at Enron you know how deep it can go, I don't think PwC wants to become another Ernst & Young.

I've read that Xu Jiayin is being pressured into liquidating some of his personal wealth to cover Evergrandes debt. I've also read that he mostly cashed out and transferred his wealth abroad, do you think he will be forced to repatriot funds and is he a possibilty of flight risk?

 

[Song Hong]

I've read that Xu Jiayin is being pressured into liquidating some of his personal wealth to cover Evergrandes debt. I've also read that he mostly cashed out and transferred his wealth abroad, do you think he will be forced to repatriot funds and is he a possibilty of flight risk?

The state media indeed wants these executive to cough out their ill gotten proceeds, bonus...etc first, before discussing any other public bail out. This really send chills down the spine of greedy tycoon. In US, they would have kept their loot while the ship sink.

 

[Shotgunner51]

I've read that Xu Jiayin is being pressured into liquidating some of his personal wealth to cover Evergrandes debt. I've also read that he mostly cashed out and transferred his wealth abroad, do you think he will be forced to repatriot funds and is he a possibilty of flight risk?

There's no flight risk or wealth transfer so to speak, he is already HK citizen (that's why HK & overseas media use Hui Ka Yan as his formal name) for quite some time. Beijing is pressurizing the WOFE's (Wholy Owned Foreign Enterprises, subsidiaries of the HKEX-listco incorporated in Mainland) to smoothly transfer assets to home buyers as well as maintaining adequate provisions for Mainland staff benefits, and won't (can't) bother about him or the HKEX-listco. If there's any regulatory actions or law suite against him or the HKEX-listco, it's would be from HK. He along with other conspired insiders are just doing whatever necessary to save themselves.