Billionaire owners of Chinese developers have dipped into their own pockets for at least $3.8 billion to save their troubled companies from default, as a cash crunch engulfs the industry.
From sales of luxury assets to stakes in sought-after listed companies, the personal balance sheets of China’s property tycoons have become key for investors to determine whether developers will meet their debt obligations. Founding chairmen of at least seven real estate companies have tapped their wealth in recent weeks to support the firms.
The efforts underscore how the liquidity crisis is more desperate than previous squeezes, when real estate firms were able to reap cash from sales blitzes or by offloading trophy assets. Now, with China’s home sales and prices falling, banks growing reluctant to lend, and yields in the offshore bond market soaring, many developers are counting on their founders as a last resort.