Evergrande on the brink of collapse? The president has already received 7 billion euros in profits



Founder and Chairman EvergrandeChinese real estate giant On the brink of collapse, got the equivalent of 6.8 billion euros in dividends Extracted from the company since 2009. Although that year Hui Ka Yan After its initial public offering on the Hong Kong Stock Exchange, it retained a large majority of the capital of 77% During all these years, even as the company’s indebtedness rose more and more, to very high levels, Evergrande (almost) did not fail to pay dividends.

These profits could have been used to increase the capital of the business or to help pay off debts. But they were taken to Evergrande and, for the most part, went into the pocket of one man. This taking into account the fact that only a minority of the capital has been distributed by other investors Hui Ka YanThe founder of the company which in recent years has attracted investors with a 13% stake and Gucci bags.

Evergrande. Chinese giant that owns a soccer club wowed people with 13% interest and Gucci bags

Of very rural and humble origin, raised to China’s richest man has been leading China’s economic transformation since the 1990s. I entered the real estate development business just in time to ride the rapid economic growth and the ravenous demand for housing linked to the rural exodus that has been at the root of some of today’s biggest Chinese capitals. hui. He even had a fortune estimated at the equivalent of more than 30 billion euros.

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Now, with more than 80% of Evergrande’s stock value on the stock exchange, its global stocks have shrunk to the equivalent of around $ 10 billion (Forbes estimate). This means that most of her fortune is attributable to dividends she received from a company in debt over $ 300 billion (around $ 255 billion) – and she didn’t even have to pay d ‘taxes on these dividends because in Hong Kong, that does not happen.

In 2010, Evergrande’s first (full) year on the stock market, with the company’s debt reaching $ 13 billion, Hui received Almost 200 million in profits. Five years later, in 2015, with the city of Evergrande already for the bank and investors 95 billion, the president almost snatched the company. 600 million profits.

2016, in which debt nearly doubled to $ 180 billion, was the only year in which no dividend was paid. But soon after, in 2017, “Hui Ka Yan took his own revenge” and withdrew. 1,777 million dividends, Later 2,232 million in 2018. At that time, the total debt stood at the equivalent of $ 243 billion, according to the company’s reports and calculations, cited by Forbes magazine.

The following year, 2019, with debts already reaching $ 286 billion, Hui Ka Yan made more than $ 1 billion in profits, which only declined in 2020 – the year in which Debt has crossed the $ 300 billion threshold, tripling in five years (since 2015). Even that year, 2020, with debts at these levels and a global pandemic, Hui Ka Yan made $ 239 million in profit.

The cancellation of capital that occurs during the payment of dividends is one of the risks that, at the present time, exacerbates concerns about the survival of the company. According to a New York Times report, to make up for this shortfall, the group asked the same employees to invest in savings products marketed by Evergrande (in fact, they were asked to lend money to the company. company) – whoever refused could not. Receive bonus supplements.

Demonstrations are taking place in several Chinese cities, organized by these same Evergrande employees, who say they are persuaded by their employer to invest in “wealth management” products – and they now run a serious risk of losing everything, or almost. Some investors have already offered extensions of payment terms, but no guarantees.

And there is another problem: if Evergrande collapses and its operations cease, those who have already made money (initial deposits) for the company to buy houses from it may now run out of money – And without the house. Evergrande acknowledged that the financial pressure was “enormous” and blamed newspapers and the press for “negative news” reducing the group’s sales (and presumably returning the money received for the products from which it was distributed to the group. citizens).

Evergrande’s debt maturity fails and group unity admits financial collapse

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