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Evergrande’s Silence Triggers Uncertainty For Property Sector – Real Estate



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It’s been almost a year since the world’s largest
property developer made global headlines on its default which
triggered a number of other major developers to follow in its
path.

Foreign investors continue to wait and see whether there is hope
for some kind of resolution or solution. However, patience is
wearing thin as the Company continues to hold out on providing any
details on how they are going to deal with its predicament.

Information may hold the key to the solution. Advisors need
information to analyse. Stakeholders need information to assess.
Whether it’s good or bad, nobody can make a decision or move
forward without being provided with information.

It is unclear at this stage what and when information will be
forthcoming. At the very least, if a proposal is being put forward,
it would include information supporting the benefit of accepting
the deal. However, if information is lacking, more time will be
spent explaining the deficiencies and thereby causing further
distrust and delay.

There could be a number of reasons for the delay of information.
However, transparency and engagement are both equally important in
order for parties to resolve their issues. Time is ticking but
there doesn’t appear to be a hard deadline for the Company to
deliver something to its stakeholders in particular those
positioned offshore. It feels that if nothing is coming, foreign
creditors may need take a more aggressive stance such as
enforcement so to at least enable a reaction and possibly yield
some information from the Company.

“You need to have a mechanism that could give any kind of
investor and lender trust, with information and transparency being
addressed, if any Chinese entity, including developers, would like
to tap offshore financing.”

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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