SHENZHEN, Sept 16 — Wu Lei says his small construction company in central China has accepted commercial paper from property developer Evergrande as payment for two years but with that paper’s value now in doubt, his firm is on the verge of collapse.
“We were working for Evergrande, so our suppliers trusted us with the materials without us paying upfront. Now they’re suing me, courts have frozen my property and I’ve sold my car. And I still have employees who need to be paid,” he said. Evergrande says it is working hard to repay investors in its wealth management products and is in talks with banks to roll over loans, but has not mentioned smaller suppliers and contractors. Financial markets, meanwhile,likely defaults on its bond payments and expectations are high that its assets will have to be restructured.
An owner of a small marketing and consultancy business from one of the poorest counties in Guizhou province said he had accepted Evergrande commercial paper from a client and was waiting on 1.5 million yuan in payment that was now two months overdue. One protester who gave only his surname Zhang left for Guangzhou on Wednesday after hearing of rumours the company would issue an announcement from there.