Evergrande chairman Hui Ka Yan was summoned by Chinese government officials on Friday after the embattled property developer warned it might not be able to meet its financial obligations and that it planned to restructure its offshore debt.
The decision by officials in Guangdong, the southern province where Evergrande is headquartered, to request a meeting came hours after the property group also disclosed that it had received a demand relating to a $260m guarantee, without providing any further details.
In a series of developments, the local government in Guangdong agreed to parachute a team of officials into the indebted company whose financial woes have deepened as Beijing has tightened restrictions on the country’s once-booming property sector.
The provincial government did not provide any further information on what the team would do.
In a Hong Kong stock exchange filing on Friday, Evergrande said that “there is no guarantee that the group will have sufficient funds to continue to perform its financial obligations”.
Shortly after the filing, the People’s Bank of China stepped up its criticism of the company, accusing it of “poor management” and pursuing “blind expansion”.
The central bank insisted that Evergrande’s plight would not affect wider market stability. The China Securities Regulatory Commission, the country’s stock market regulator, also told reporters that risks coming from the developer were controllable.
However, the scale of Evergrande’s borrowing — the group has more than $300bn in liabilities — has already led to a sector-wide liquidity crisis that has swept up rival developers such as Kaisa. Evergrande’s outsized role in China’s property sector has also left global investors tracking its fate.
Although Evergrande has missed several interest payments on offshore bonds, it has not formally defaulted because it has met its obligations before the end of 30-day grace periods.
In the Hong Kong filing, the company said that it “plans to actively engage with offshore creditors to formulate a viable restructuring plan of the company’s offshore indebtedness”.
Advisors to Evergrande’s international bondholders have previously complained of no “meaningful engagement” from the company.
In its statement, the central bank described overseas bonds investors as “mature” and said that there were “legal provisions and procedures for dealing with relevant issues”.