Islam News – The troubled property giant Evergrande, once China’s most prolific developer, has become the country’s most indebted company, a position that means its default could ripple across the Chinese economy.
The ratings agency Fitch said this month that a default “appears probable.” Moody’s, another ratings agency, said Evergrande was out of cash and time. Stocks slumped around the world Monday as Evergrande and other worries weighed on investors.
According to The New York Times, The company rode China’s property boom that urbanized large swathes of the country and resulted in nearly three-quarters of household wealth being tied up in housing. Evergrande was at the center of power in an economy that came to lean on the property market for supercharged economic growth.
But regulators in China are cracking down on reckless borrowing habits of property developers. And the property market is slowing down, with less demand for new apartments.
Crisis: Evergrande now owes money to lenders, suppliers and foreign investors. It owes unfinished apartments to home buyers and has racked up more than $300 billion in unpaid bills. And it faces creditor lawsuits.
Source: The New York Times