Rise and fall of real estate giant

BEIJING • China Evergrande Group has defaulted on its debt, Fitch Ratings said on Thursday, citing the real estate giant's failure to make repayments on over US$1.2 billion (S$1.6 billion) in US dollar bonds.

Steel factory worker Hui Ka Yan starts Evergrande.

After going public in 2009, Evergrande takes control of Chinese Super League club Guangzhou, renaming it Guangzhou Evergrande, and spends billions of dollars on foreign players.

It moves into the dairy, grain and oil businesses and later tries to build an electric car - kicking off a debt-fuelled spending spree.

Mr Hui becomes the richest person in Asia with a net worth of US$43 billion.

China's central bank adds Evergrande to its list of highly indebted conglomerates to watch.

Regulators announce caps for three different debt ratios in a scheme dubbed "three red lines", which tightens lending to the real estate sector. Evergrande sells 28 per cent of its property management unit and starts offloading properties at steep discounts.

Local governments set a maximum cap on deposits, and hold and release funds to developers in batches after inspecting the progress of projects.

An advertiser sues the company for unpaid dues, the first in a string of cases filed by nervous sub-contractors. Work at several construction sites stops.

Global ratings companies downgrade Evergrande's outlook to negative.

Evergrande says it may not be able to meet its liabilities. Public protests erupt outside its Shenzhen headquarters and other places.

Evergrande suspends trading on the Hong Kong stock exchange on Oct 4, pending an announcement on a "major transaction".

China's central bank says in mid-October that risks for the wider financial sector from the firm's crisis were controllable.

Evergrande shares resume trading on Oct 21, plunging more than 10 per cent at the open - hours after the firm said a US$2.58 billion deal to sell a major stake in its property service arm had fallen through.

The local government in Guangdong summons Mr Hui, as it says it is sending a working group to the firm.

Analysts say this signals the formal start of the giant's debt restructuring.

Mr Shehzad Qazi, managing director of data analytics firm China Beige Book, tells Agence France-Presse that the restructuring will "ultimately be a controlled demolition" - a bid by the Chinese government to let Evergrande fail, while seeking to contain the impact.

On Thursday, Fitch Ratings declares the firm in default.

AGENCE FRANCE-PRESSE