The Chinese mega real estate group Evergrande shares tumbled 11,6% on Friday in the Hong Kong stock exchange, following on Thursday's nonpayment of US$ 84 million in interests on maturing offshore bonds.
The company has now another thirty days before it is officially considered in default, if it does not comply, and in the meantime there is another US$ 47,9 million it must address on 29 September.
But despite all the financial complications, which have seen Evergrande's shares collapse some 80% so far this year, under the burden o a declared debt of US$ 300bn, the company's founder and president Hui Ka Yan has seen his personal fortune balloon to US$ 11,1bn according to Forbes.
Of the eleven billion, eight billion are estimated to have generated when Evergrande's IPO in 2009 at the HK market. Since then the real estate giant debt has not ceased to increase and the compnay paid dividends every year except in 2016.
And because Mr. Hui holds 77% of shares, it meant that in two years only he pocketed some four billion dollars, estimates Forbes.
During that period the overall declared debt of the group climbed to US$ 302 billion at the end of 2020. This compares to the US$ 7,7bn in 2009.
Started 25 years ago in Guangzhou province, Evergrande rapidly became the second largest real estate group in sales under the leadership of Hui. But concerns about the growing debt and its incapacity to pay interests resulted in the downfall of share value this year.
The impact on Asian financial markets has been overwhelming particularly when the company last week originally announced it would be unable to comply with interest payments.
Evergrande also is in debt with its clients, it should deliver some US$ 1,6 million in flats which remain unfinished despite the fact customers paid for them.
If Hui is to remain at the helm of the company is hard to say, but it will have to begin selling non essential assets and transfer much of its enterprises to smaller companies, according to Anne Stevenson-Yang an expert in the Chinese market. This will mean that domestic debt of people who purchased homes, invested or lent money for Evervgrande to construct buildings, will not see their contracts honored or money recovered, added Ms Stevenson-Yang.
Hui, 63, graduated at the Science and Technology Universiy of Wuhan and in 1982 started workinag at a steel foundry where he remained for ten years, before launching Evergrande. He began buying low cost real estate, and his personal fortune peaked to US$ 36,2 billion in the Forbes 2019 billionaire's list. On 5 March this year with an estimate US$ 27,7bn he was catalogued at the53rd richest person in the world.
But as the Evergrande shares crashed, he ended with US$ 3,5bn, having lost some US$ 20bn.
Desperate to access to fresh funds, Evergrande called on the thousands of its staff to loan money to the company, and retained bonus payments to those who refused, according to the New York Times.
Anyhow despite the ups and downs with 11bn dollars Hui remains among the richest billionaires in CHina.