China Evergrande, the troubled property giant that has become a symbol of debt and excess in the world’s second-largest economy, said on Tuesday that it faced “tremendous” financial pressure and had hired restructuring experts to “explore all feasible solutions” for its future.
The company’s fate, however, remains unclear, as it struggles in a country where business troubles often attract the direct attention — and the direct meddling — of Beijing.
Evergrande’s admission that its finances have taken a sharp turn sent its already battered shares down by 12 percent on Tuesday. Its shares have lost more than four-fifths of their value over the past year.
Its foreign-traded bonds plunged, too, leaving global investors in some cases with investments valued at roughly 25 cents to the dollar.
The property developer has become corporate China’s biggest mess. Its fate threatens the property sector and China’s broader financial system, testing the resolve of regulators who are trying to clean up the country’s corporate culture.
Evergrande has been hit with a barrage of negative attention from panicked home buyers and experts warning of an impending default in recent weeks. It owes suppliers, creditors and investors more than $300 billion. Hundreds of its unfinished property developments dot the skyline in cities across the country.
Evergrande’s troubles have cast doubt over China’s property market, one of its most important economic growth engines, but also one that is showing signs of flagging. Shares of other Chinese property developers also fell after Evergrande’s disclosure on Tuesday.