Evergrande, Now 'Buried in Debt', Sued by Two Hong Kong Real Estate Agencies

The Reason for the Lawsuit is Non-Payment of Fees

[Asia Economy Reporter Cha Min-young] China's second-largest real estate developer Evergrande, burdened with debt exceeding 350 trillion won, is reportedly being sued by two Hong Kong real estate brokerage firms for unpaid commissions.

According to foreign media on the 6th (local time), Hong Kong real estate brokerage firm Centaline filed a lawsuit last month at the Hong Kong court demanding Evergrande pay unpaid commissions amounting to 3.1 million Hong Kong dollars (approximately 480 million won).

An executive from Centaline revealed that the company also filed a lawsuit last month at the Guangzhou court in China against Evergrande to demand payment of commissions.

Another Hong Kong real estate brokerage firm, Midland, also filed a lawsuit claiming it has not received commissions of 43.45 million Hong Kong dollars (approximately 6.67 billion won) from Evergrande.

Evergrande has been conducting apartment sales projects in Hong Kong since October 2019, with Hong Kong real estate brokerage firms participating as partners.

Evergrande faced a default crisis after failing to pay dollar bond interest of 83.5 million dollars (approximately 99.3 billion won) and 47.5 million dollars (approximately 55.9 billion won) scheduled for the 23rd and 29th of last month, respectively. It is reported that Evergrande only paid interest on yuan-denominated bonds but failed to pay interest on dollar-denominated bonds.

International credit rating agency Fitch downgraded Evergrande and its affiliates' long-term foreign currency issuer default rating (IDR) to 'C' in a report released on the 29th of last month (local time). Fitch stated in the report, "The downgrade reflects the situation where interest on dollar-denominated bonds has not been paid."

The distrust that started with Evergrande is also threatening Chinese companies. Evergrande's electric vehicle subsidiary, Evergrande Auto, among others, has seen its stock price plummet, causing a chain reaction.

However, the market expects that the Chinese government will not directly support Evergrande Group with bailout funds. Bloomberg reported that while the Chinese government is trying to prevent the Evergrande crisis from spreading, it is unlikely to bail out Evergrande.

This content was produced with the assistance of AI translation services.