Struggling Evergrande Group should save itself from collapse rather than bet on a government bailout, said Hu Xijin, the editor-in-chief of the Chinese Communist Party (CCP) mouthpiece media Global Times.
Over the years, China’s second-largest property developer Evergrande Group has been highly leveraged by driving its growth on debt. Its $300 billion in total liabilities now equal two percent of China’s 2020 GDP.
Hu warned the property giant about irresponsible financial manipulation and expansion on the social media platform WeChat, adding that the company cannot deem itself “too big to fail” and push its luck over a helping hand from the ruling Party.
“[Troubled enterprises] must be able to use market means to save themselves,” He said, flagging a warning over “hoping for a lucky break.”
Reuters cited sources close to the matter on Friday that Evergrande bondholders had selected investment bank Moelis & Company and law firm Kirkland & Ellis LLP as advisers on a potential debt restructuring.
On Sept. 14, the company announced it hired Houlihan Lokey and Admiralty Harbour Capital as joint financial advisers to explore all feasible options.
The largest case, by assets, that Houlihan Lokey advised on was Lehman Brothers Holdings Inc., a global financial services firm forced to shut down in September 2008 while owing over $600 billion.
”It’s up to Evergrande itself,” the editor said.
Reuters contributed to this report.
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Rita Li is a reporter with The Epoch Times, focusing on China-related topics. She began writing for the Chinese-language edition in 2018.
