‘EXERCISE CAUTION’: China Evergrande facing 1,931 lawsuits worth $60 billion
Embattled Chinese developer China Evergrande has warned investors to “exercise caution” as it revealed the true extent of the crisis facing one of its units.
Hengda Real Estate, a principal subsidiary of Evergrande, says it had a total of 1,931 pending litigation cases as of the end of July 2023.
Those cases each involve more than US$4 million, with the total amount involved in excess of $60 billion.
“Holders of the company’s securities and potential investors of the company are advised to exercise caution when dealing in the securities of the company,” said China Evergrande Group Chairman Hui Ya Kan.
The company has also revealed that Hendga Real Estate’s unpaid debts total $38 billion and its overdue commercial bills total $28 billion.
China Evergrande has also revealed:
- As of the end of July, Hengda Real Estate had completed the disposal of 70 real estate projects.
- During July 2023, there were 164 new enforcement cases against Hengda Real Estate involving $1.7 billion.
- During July 2023, there were 55 new cases in which the equity interest in subsidiaries and investee companies help by Hengda Real Estate were frozen. The total amount involved was more than $6 billion.
The news comes as China’s largest property developer, Country Garden, reported a record half year loss of almost US$7 billion and provided investors an ominous warning about its ongoing ability to repay debts.