Property Crisis Asia’s Richest Woman Loses Half Her Wealth

Asia’s richest woman lost over half her fortune over the past year as China’s real estate sector was rocked by a cash crunch, a billionaire index showed Thursday.

According to the Bloomberg Billionaires Index, Yang Huiyan, a major shareholder in the massive Chinese real estate company Country Garden, saw her net worth drop by more than 52% to $11.3 billion from $23.7 billion a year before.

Yang’s riches suffered a significant setback on Wednesday when shares of Country Garden, a company with its headquarters in Guangdong, plummeted 15% after the company announced it would issue fresh shares to fund money.

According to official media, Yang received her money when her father, Yang Guoqiang, the founder of Country Garden, donated his shares to her in 2005.

She became Asia’s richest woman two years later after the developer’s initial public offering in Hong Kong.

Read Also: Your Support For Russia Complicating Relations, US Warns China

But she is now barely holding onto that title, with chemical fibres tycoon Fan Hongwei a close runner-up with a net worth of $11.2 billion on Thursday.

Chinese authorities cracked down on excessive debt in the property sector in 2020, leaving major players such as Evergrande and Sunac struggling to make payments and forcing them to renegotiate with creditors as they teetered on the edge of bankruptcy.

Buyers across the country, furious at lagging construction and delayed deliveries of their properties, have begun withholding mortgage payments for homes sold before completion.

While Country Garden has remained relatively unscathed by industry turmoil, it spooked investors with a Wednesday announcement that it planned to raise more than $343 million through a share sale, partly to pay debts.

Proceeds from the sale would be used for “refinancing existing offshore indebtedness, general working capital and future development purposes,” Country Garden said in a filing with the Hong Kong stock exchange.

China’s banking regulator has urged lenders to support the property sector and meet the “reasonable financing needs” of firms as analysts and policymakers fear financial contagion.

The property sector is estimated to account for 18-30 percent of the country’s GDP and is a key driver of growth in the world’s second-largest economy.

Analysts have warned that the industry is mired in a “vicious cycle” that would further dampen consumer confidence, following the release of dismal Q2 growth figures that were the worst since the start of the Covid-19 pandemic.

Africa Today News, New York

Leave a Reply

Your email address will not be published.