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Evergrande chief pledges luxury assets to pay company debts

written by Bella Palmer
evergrande

Evergrande's troubles in meeting bond repayments have left many of its investors and creditors in financial chaos

As developer China Evergrande Group scrambles to meet its debt obligations, its founder is freeing up funds from luxury assets including art, calligraphy and three high-end homes, according to filings and a person with knowledge of the matter.

Chinese authorities have told Evergrande chairman Hui Ka Yan to use some of his personal wealth to help pay bondholders, two separate people with knowledge of the matter told Reuters last month.

Evergrande's troubles in meeting bond repayments have rattled markets and left many of its investors, creditors and suppliers in financial chaos.

Guo Hui, whose cleaning business is owed more than 18 million yuan ($2.8 million) by Evergrande, had to sell his Porsche Cayenne and an apartment to raise cash and pay debts.

He should be selling his things, Guo told Reuters. He had no choice once the authorities made him.

Hui pledged one of his Hong Kong mansions of around 5,000 square feet in The Peak, Hong Kong's most prestigious residential enclave with sweeping views over the city's gleaming skyscrapers, for a loan from China Construction Bank in October, according to a filing with Hong Kong's Land Registry.

The property is worth around HK$800 million (US$103 million), an estate agent told Reuters and local media said it was pledged to raise about HK$300 million (US$38 million) to repay an overdue Evergrande bond.

The tycoon, ranked as Asia's wealthiest man in 2017, pledged two other luxury houses in the same development to Orix Asia Capital Ltd on Nov 8 for undisclosed amounts, according to the Land Registry. Local media outlet HK01 said on Tuesday the total amount raised was HK$821 million (US$105 million).

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