You know things are bad when a company resorts to fire sales but even rock bottom prices do not attract buyers. Evergrande, the world’s most-indebted property developer, is running out of time. The grace period on its first batch of unpaid offshore bonds ends this week. A formal default would hurt the property sector and help some others.
The Chinese property developer has been trying to sell a majority stake in its property management division. The expected proceeds of $2.6bn are badly needed. Missed debt payments are piling up.
But the sale of shares in Evergrande Property Services has fallen through. Government officials brokering the deal were unable to calm buyer nerves. Evergrande is also reported to have failed to find a purchaser for its Hong Kong headquarters.