Thursday, October 28, 2021

Chinese State Media Editor Warns Evergrande to Dream of State Bailout

Hu Zijin, editor-in-chief of the Chinese Communist Party (CCP) mouthpiece Media Global Times, said the struggling Evergrande group should save itself from collapse rather than betting on a government bailout.

For years, Evergrande Group, China’s second-largest property developer, has been making huge gains by driving its growth on debt. Its $300 billion in total liabilities is now equivalent to two percent of China’s 2020 GDP.

Hu warned the asset giant about irresponsible financial manipulation and expansion on the social media platform WeChat, saying the company cannot consider itself “too big to fail” and that the ruling party would seek help. You can advance your luck.

“[Troubled enterprises] Must be able to use market instruments to protect themselves,” he said, cautioning on “expect a lucky break”.

Reuters on Friday cited sources close to the matter that Evergrande bondholders had selected investment bank Moelis & Company and law firm Kirkland & Ellis LLP as advisors on a potential debt restructuring.

Read Also:  China's central bank says Evergrande risks 'controllable'

On 14 September, the company announced that it had appointed Houlihan Loki and Admiralty Harbor Capital as joint financial advisors to explore all viable options.

The largest case in terms of assets, which was advised by Houlihan Loki, was the forced closure of Lehman Brothers Holdings Inc., a global financial services firm, in September 2008, while owed more than $600 billion.

“It’s up to Evergrande,” said the editor.

Reuters contributed to this report.

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Rita Lee is a reporter for The Epoch Times, which focuses on China-related topics. He began writing for the Chinese language edition in 2018.

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This News Originally From – The Epoch Times

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