An island like a crab and the largest football stadium in the world: Paranoid Evergrande projects


The Chinese real estate developer Evergrande is on the verge of bankruptcy due to high debts. It is based on construction projects that suffer from pride and paranoia – from unfinished houses to theme parks to the largest football stadium in the world.

Evergrande owes more than $ 300 billion – almost as high as Portugal’s national debt – and it has serious cash flow problems. The group says they have nearly 1,300 projects underway in 280 Chinese cities, but many of them are on hold.

The problems caused the share price of the property developer, founded in 1996, to collapse by 85 percent this year. Evergrande is worth nearly $ 5.5 billion, a tenth of what it was in four years. There are great fears that the second real estate giant in China will collapse. can achieve Domino effect Leadership in the Chinese economy and with it an expansion, so Pessimistsin the world economy.

the essence

  • Chinese real estate developer Evergrande has more than $ 300 billion in debt and is grappling with serious cash flow problems.
  • Many of the 1,300 ongoing projects in 280 Chinese cities have stalled.
  • Xu Jiayin’s empire relied mainly on borrowed money.
  • Suppliers and creditors are demanding hundreds of billions of dollars in outstanding invoices.
  • China’s second largest real estate giant also has a soccer team, packaging facility, streaming service and is investing in electric vehicles.

Over the next eight days, the company will have to pay back $ 120 million in bond interest in two installments. Over $ 600 million by the end of this year. In March, the value of the bonds due was $ 2 billion. Another 1.45 billion in April. If Evergrande doesn’t get these funds together in time, this could be the end. Especially since the Chinese government, no longer in the mood for Chinese billionaires, is not ready to jump to the rescue.

Shu Jian

Chairman and founder Xu Jiayin – known as Hui Ka Yan in Cantonese – doesn’t seem panicked at first glance. In a letter to employees, the former steel worker, whose fortune was estimated at $ 45 billion in 2017, said “the darkest period is almost over”. “Evergrande will soon be leaving the rough zone.” He didn’t say a word about how he was going to achieve it. According to experts, the group has no choice but to get rid of large parts.

Evergrande has nearly 800 unfinished housing projects in China. According to Tom Simmonts, an analyst at KBC, suppliers and creditors have drawn hundreds of billions of dollars in outstanding accounts. 1.4 million people are waiting for their promised home. Xu Jiayin, who still owns 71% of the company, said via WeChat that he would pay duped investors with real estate instead of cash: They get apartments, offices and retail space with discounts of up to 50%.

The empire is mostly based on borrowed money. Xu Jiayin bought land, built buildings on it, sold low-margin housing to make money quickly, and repeated the same scenario elsewhere.

Evergrande, which employs 200,000 people and indirectly employs more than 3.8 million people, first announced last year that it was struggling to meet its financial obligations. Xu Jiayin’s empire relied mainly on borrowed money. He bought land on it, built buildings on it, sold low-margin apartments to make money fast enough, and then repeated the same scenario elsewhere. However, as the Chinese real estate market slowed and the debt-equity gap widened, things went in the opposite direction. Also, many projects turned out to be paranoid.

Off the coast of the Chinese Yangpun peninsula, Evergrande has built a 380 hectare artificial island in the shape of a crab.

An unfinished amusement park in Jiangsu Province.

artificial island

Off the coast of the Chinese Yangpun peninsula in the Chinese province of Hainan – Hawaii – the Evergrande has built an artificial 380 hectare crab-shaped island with a total length of 40 kilometers of coastline. Ocean Flower Island will include a 12 acre water park, hotels, museums, amphitheater, arboretum, cinemas, parks, shops and an opera. Estimated cost: 100 billion yuan, or $ 15 billion. An indoor amusement park is also being built on the island under the trade name Evergrande Fairyland. Evergrande wants to build 15 such parks in the fairyland in China in the long term.

The group does more than real estate. In 2010, she bought a soccer team now known as Guangzhu Evergrande FC. Under the leadership of former Italian professional footballer Marcello Lippi, the club won the AFC Champions League in 2013, the international football tournament for Asian and Australian clubs. The club also runs one of the largest football schools in the world. I invested $ 185 million.

Evergrande began building the world’s largest football stadium in Guangzhou. The roof opens like a lotus flower.

Evergrande began building the world’s largest football stadium in Guangzhou last year. The football temple will have 105,000 seats and will include sports halls, a shopping center, cinemas and an amusement park for children. Cost: 1.7 billion dirty dollars. The roof opens like a lotus flower.

In late 2019, Xu Jianyin also announced that it would invest $ 7 billion in the development of electric vehicles over the next three years. Three factories are being built in China for this purpose. Evergrande is also involved in a major water bottling plant, Evergrande Spring, and in the streaming service HengTeng Networks, a Chinese network operated by Netflix. According to calculations by Goldman Sachs, Evergrande has more than 200 subsidiaries in Germany and abroad. The value of the assets is estimated at 265 billion euros.


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