Evergrande sets up risk management committee - RTHK
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Evergrande sets up risk management committee

2021-12-06 HKT 21:53
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  • China Evergrande says the committee will play an important role in 'mitigating and eliminating the future risks' of the group. File image: Shutterstock
    China Evergrande says the committee will play an important role in 'mitigating and eliminating the future risks' of the group. File image: Shutterstock
China Evergrande Group has set up a risk management committee that includes officials from state entities as the cash-strapped property developer inches closer to a debt restructuring.

The real estate firm, which is grappling with over US$300 billion in liabilities, said on Monday that the committee would play an important role in "mitigating and eliminating the future risks" of the group.

On Friday, Evergrande said it would seek to restructure its offshore debt after acknowledging that it may no longer be able to meet its financial obligations, prompting the provincial government in Guangdong to step in to help manage the fallout.

"Evergrande's been trying to sell assets to repay debt, but Friday's statement basically says it is going to 'surrender' and needs help," said Conita Hung, investment strategy director at Tiger Faith Asset Management.

"This sends a very bad signal."

Evergrande shares slumped to a record low on Monday as it teetered, yet again, on the brink of default with the end of a 30-day grace period looming on dues totalling US$82.5 million.

At the end of Asia business hours, two bondholders said they had yet to receive payments.

Evergrande, which has made 11th-hour coupon payments in the past two months, declined to comment. (Reuters)