- Title: Unpaid by Evergrande, supplier sells Porsche and home to rescue his business
- Date: 28th September 2021
- Summary: (SOUNDBITE) (Mandarin) GUO HUI, 50, OWNER OF CLEANING COMPANY FEIYUN, A VENDOR OF EVERGRANDE, SAYING: "Anyway, the purpose of selling my car and apartment is to lighten my debt. The Evergrande's incident has reached this extent, so I can only wait for the government and the court's verdict, and listen to God's fate. The company will continue to operate, and I will definitely buy my car back when I make some money. I am sure I will be able to buy it back." VARIOUS OF GUO SMOKING OUTSIDE THE PORSCHE STORE CAR DRIVING OUT OF CAR STORE VARIOUS OF GUO TALKING WITH THE STAFF AND SIGNING THE SALES CONTRACT GUO STANDING AT THE DOOR OF THE PORSCHE STORE GUO AND STAFF WALKING TOWARD GUO'S CAR (SOUNDBITE) (Mandarin) GUO HUI, 50, OWNER OF CLEANING COMPANY FEIYUN, A VENDOR OF EVERGRANDE, SAYING: "Let me sit in my car one more time." / GUO GETTING INTO HIS CAR (SOUNDBITE) (Mandarin) GUO HUI, 50, OWNER OF CLEANING COMPANY FEIYUN, A VENDOR OF EVERGRANDE, SAYING: "It was quite sad to sit in my own car for the last time." (SOUNDBITE) (Mandarin) GUO HUI, 50, OWNER OF CLEANING COMPANY FEIYUN, A VENDOR OF EVERGRANDE, SAYING: "Goodbye to my car."/ GUO GETTING OUT AND WALKING AWAY SHENZHEN, GUANGDONG PROVINCE, CHINA (SEPTEMBER 26, 2021) (REUTERS) EVERGRANDE HEADQUARTERS IN SHENZHEN VARIOUS OF VEHICLES AND PASSENGERS PASSING BY UNDER THE EVERGRANDE SHENZHEN HEADQUARTERS BUILDING WITH TEXT READING (Chinese): "Evergrande Group" VARIOUS OF WORKERS WITH HELMET RIDING BICYCLES AND WALKING
- Embargoed: 12th October 2021 13:20
- Keywords: China Evergrande company crisis equities investor markets vendor
- Location: SHENZHEN AND GUANGZHOU, GUANGDONG PROVINCE, CHINA
- City: SHENZHEN AND GUANGZHOU, GUANGDONG PROVINCE, CHINA
- Country: China
- Topics: Asia / Pacific,Company News Markets,Economic Events
- Reuters ID: LVA003EWMTB9J
- Aspect Ratio: 16:9
- Story Text: Sitting in the office of his 24-year-old cleaning business, Guo Hui sighs with exasperation as he looks at his spreadsheets showing the 20 million yuan ($3.09 million) that embattled real estate giant China Evergrande owes him.
Guo says he is now counting on the Chinese government to resolve a crisis that has left his own company, which employs hundreds, on the brink of bankruptcy.
In the meantime, he is selling his Porsche Cayenne and put his apartment on the market in a scramble to raise cash to pay debts and wages.
"I don't have any other alternatives, I have to sell my car. I bought a Porsche for 1.2 million yuan ($186,000). It's two years old and has more than 20,000 kilometres of mileage. I've already spoken to the shop, and I'm going to sell it for 850,000 yuan ($132,000). I can't predict Evergrande's repayment date, all that I know is that if I don't pay my loan, I'll be on a credit blacklist," said the 50-year-old business owner.
Originally from Sichuan province, Guo founded his cleaning business, called Feiyun, more than two decades ago.
Like many self-made entrepreneurs of his generation, Guo sees his as a rags-to-riches story that went hand in hand with the economic rise of China.
He said he has been working since 2017 with Evergrande, which accounted for 90% of his business when he started to face problems in June, when payments on commercial paper issued by the company stopped.
China Evergrande did not immediately respond to a request for comment on Guo's assertions.
"We went to (Evergrande's) Guangzhou headquarters to discuss about repayments. We also ask for help from the government's petition department. What we can do now is just trust the government will help us to solve it. But I have also prepared for the worst possible scenario which is the company going bankrupt," Guo told Reuters in his office on Sunday (September 26).
Guo's company receives digital commercial papers in payment for Evergrande, which then take one-year before they can start clearing, and then another year before payment. The recent missed payments have been pushing his bottom line further into the red, he said.
"In this situation, there is nothing much we can do. We visited their head and contact person and they said they couldn't pay us without money. When we asked when it would be paid, they said they don't know."
Feiyun provides cleaning and repair services for Evergrande apartments in Guangdong province, ensuring that new builds are clean before being shown to prospective buyers.
It has about 100 permanent staff and uses 700 to 800 contractors, depending on demand, most of them migrants from less-wealthy inland provinces, Guo said.
A few months ago, Guo had a team of 300 cleaning thousands of apartments at the high-end Zhanjiang Evergrande Waitan Gardens development in the southwest tip of the province on two contracts totalling about 1.5 million yuan.
Maotai bottles lined the shelves behind Guo, the single photo on his desk showed him skiing in northern China in 2017, "before things got hard".
An outdoors enthusiast, Guo had been planning eventually to hand his business over to his son Guo Jing, who stood listening nearby, so that he and his wife could travel abroad - plans thwarted first by the COVID-19 pandemic and then Evergrande's crisis.
Beijing has been largely quiet on the Evergrande situation, which has rattled global markets and left investors as well as hundreds of thousands buyers of unfinished apartments facing uncertainty, triggering protests at Evergrande offices this month.
"I can only wait for the government and the court's verdict," Guo said.
The next day, Guo drove to a Porsche dealership to sell back what he sees as a symbol of his hard work. He asked to sit in it one more time after the papers were signed.
Having come from poverty once, Guo is confident his fortunes will turn.
"I'll definitely buy my car back, when I make some money. I'm sure I'll be able to get it back."
(Production: Thomas Suen, Travis Teo)
- Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2021. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None