HONG KONG (REUTERS) – As developer China Evergrande Group scrambles to meet its debt obligations, its founder is freeing up funds from luxury assets including art, calligraphy and two high-end homes, according to filings and a source.
The Chinese authorities have told Evergrande chairman Hui Ka Yan, 63, to use some of his personal wealth to help pay bondholders, two separate people with knowledge of the matter told Reuters last month.
Evergrande’s troubles in meeting bond repayments have rattled markets and left many of its investors, creditors and suppliers in financial chaos.
Mr Guo Hui, whose cleaning business is owed more than 18 million yuan (S$3.8 million) by Evergrande, had to sell his Porsche Cayenne and an apartment to raise cash and pay debts.
“He should be selling his things,” Mr Guo told Reuters. “He had no choice once the authorities made him.”
Mr Hui pledged one of his Hong Kong mansions of around 5,000 sq ft in The Peak, Hong Kong’s most prestigious residential enclave, for a loan from China Construction Bank last month, according to a filing with Hong Kong’s Land Registry.
Around HK$300 million (S$52 million) was raised to repay an overdue Evergrande bond, local media reported.
The tycoon, ranked as Asia’s wealthiest man in 2017, pledged a second luxury house on The Peak to Orix Asia Capital on Nov 8 for an undisclosed amount, according to the Land Registry.
With sweeping views over the city’s gleaming skyscrapers, the properties are worth around HK$800 million each, an estate agent told Reuters.
Mr Hui and Evergrande did not respond to requests for comment regarding the properties on The Peak.
China’s State Council Information Office did not immediately respond to a request for comment.
Raised by his grandmother in a rural village, Mr Hui founded Evergrande in 1996 in southern Guangzhou city, supplying low-priced homes and building a fortune.
He developed a passion for calligraphy, art and Koi carp – fish seen as a symbol of good luck and fortune for which he paid tens of millions of yuan, according to a source with direct knowledge of the matter.
Under Mr Hui’s orders, Evergrande has been selling some art and calligraphy to raise fresh capital, said the source. The source declined to be named due to the sensitivity of the situation.
Reuters could not immediately determine how much had been raised by selling the art pieces or what the money has been used for.
Evergrande did not respond to a request for comment regarding the art sale.
The source also said Evergrande sold two Gulfstream jets in recent weeks.
The Wall Street Journal reported earlier this month Evergrande raised more than US$50 million by selling two of its private jets to American aircraft investors.
Hui also owns a 60m yacht called Event, estimated to be worth US$60 million, as well as a private Airbus jet, according to Chinese media reports.
Reuters could not independently verify the ownership of Mr Hui’s yacht and private jet.
Mr Hui and Evergrande did not respond to requests for comment regarding his aircraft, yacht and other assets.
While Mr Hui’s net worth has plunged over the past few years from around US$45 billion (S$60.9 billion) in 2017, he is still estimated to be worth US$11.3 billion, according to the Hurun China Rich List 2021, released last month.
But even as he moves to sell some of his personal assets, the proceeds raised pale in comparison to Evergrande’s liabilities of more than US$300 billion, equivalent roughly to the gross domestic product of South Africa.
After Evergrande last week again averted a destabilising default with a last minute bond payment, its next deadline is Dec 28, with coupon payments totalling more than US$255 million due.