China, Beijing –Shares of Evergrande, the debt-ridden Chinese property behemoth, rose on Monday after a state company official was named to its board, clearing the path for a government rescue plan.
Evergrande, which has been on the verge of bankruptcy for months due to difficulties in repaying a debt mountain of more than $300 billion, finished nearly 4% higher on Monday.
The rise occurred after a stock exchange filing on Sunday revealed that the company had added Liang Senlin of China Cinda Asset Management, one of the country’s four largest state asset managers, to its board of directors.
The province government of Guangdong, where Evergrande is located, is presently monitoring the debt restructuring process, and the appointment of an official from a large state asset management appears to have delighted investors.
State-owned enterprises are anticipated to take over the assets of the failing property behemoth, and the corporation established a risk management committee last month, with top executives from state agencies facilitating the process.
On Sunday, Evergrande announced the appointment of Shawn Siu, the head of its electric car division, to the firm’s board of directors, as the corporation counts on this booming industry to help bail out its struggling real estate industry.
On Sunday, Evergrande announced the appointment of Shawn Siu, the head of its electric car division, to the firm’s board of directors, as the corporation counts on this booming industry to help bail out its struggling real estate industry.
Despite missing a payment of more than $1.2 billion in December, the firm has consistently said that it would complete its projects and deliver them to purchasers in a desperate attempt to recoup its debts.
Property enterprises in China have suffered in the aftermath of Beijing’s push to reduce excessive debt in the real estate sector as well as manage widespread consumer speculation.
