Long-simmering doubts about Evergrande’s financial health intensified this week after the company had a US$20 million bank deposit frozen by a local court and was hit with a property sales ban by a city government alleging it had failed to set aside enough funds in escrow accounts.
Investor confidence in China Evergrande Group is plunging amid mounting signs that the world’s most indebted developer faces a cash crunch.
The property giant’s stock tumbled to a four-year low on Tuesday, July 20, extending its two-day loss to 23% and wiping out a surge last week that was fuelled by hopes for a special dividend. Several of Evergrande’s local and offshore bonds sank to all-time lows, with its 2025 dollar note falling to 54 cents. Bonds of other junk-rated Chinese borrowers also dropped as worries about contagion increased.
