EXCLUSIVE| Major suppliers to Chinese real estate giant Evergrande have announced they will suspend lending and halt work, a move that could signal trouble for the global economy.
Asia Markets was shown a “Notice of Suspend of Loans and Works” from a collection of Evergrande suppliers in Hubei province, informing government officials of their intentions.
The statement said small and medium-sized suppliers in the region have been mired in crisis since Evergrande’s insolvency began in July last year and have no choice but to stop repaying their own debts.
The suppliers say they have spent all of their net worth buying materials to supply various Evergrande projects that are still ongoing.
“Suppliers are heavily in debt, their lives have been destroyed, they can no longer continue,” the statement said.
The development is another worrying sign for the struggling company, which many analysts say is on the brink of collapse.
Creditors have severed ties with the developer since at least June this year, and China’s recent bankruns only fuel fears that the country’s entire economy is on shaky ground.
At least 270 owners of work-in-progress homes have reportedly issued a statement this month that they will stop paying billions of dollars in mortgages.
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