Dozens of anxious investors protested outside the headquarters of troubled Chinese property giant Evergrande Tuesday, after the debt-laden firm conceded it was under "tremendous pressure" and may not be able to meet its repayments.

Evergrande's plight has raised fears of a contagion across the debt-mired Chinese property sector -- which accounts for more than a quarter of the world's second-largest economy -- with a knock-on for banks and investors.

The Hong Kong-listed developer is sinking under a mountain of liabilities totalling more than $300 billion after years of borrowing to fund rapid growth.

An estimated 60 to 70 people gathered outside Evergrande's headquarters in the southern city of Shenzhen, demanding answers from the company.

The anxious investors crowded in front of the building's entrance as police with riot shields were deployed to maintain order, according to AFP reporters at the scene.

"Our boss is owed over 20 million yuan ($3.1 million), and many people here are owed even more," one man who gave his surname as Cheng told AFP.

"We are definitely very anxious. There's no clear explanation right now... they should have paid the money when it was due."

Another man outside the headquarters said his firm was a supplier to Evergrande, and is owed more than 30 million yuan ($4.6 million).

He said he had previously been offered repayment in the form of property by the group, but they failed to reach agreement on this offer.

"My family has also been threatened... Evergrande employees in my hometown warned my mother to tell me to stop causing trouble and come home," he said.

- 'All feasible solutions' -

Evergrande was downgraded by two credit rating agencies last week while its shares tumbled below their 2009 listing price, with a barrage of bad headlines and speculation of its imminent collapse on Chinese social media.

On Monday, the company insisted it will avoid bankruptcy.

But on Tuesday, it issued another statement to the Hong Kong stock exchange, saying it had hired financial advisers to explore "all feasible solutions" to ease its cash crunch.

The statement warned that there was no guarantee Evergrande would meet its financial obligations.

The firm blamed "ongoing negative media reports" for damaging sales in the pivotal September period, "resulting in the continuous deterioration of cash collection by the Group which would in turn place tremendous pressure on... cashflow and liquidity".

Shares in the firm fell more than 11 percent Tuesday, and are down almost 80 percent since the start of the year.

The firm has some 1.4 million properties that it has committed to complete -- around 1.3 trillion yuan ($200 billion) in pre-sale liabilities, as of the end of June, according to an estimate by Capital Economics.

Evergrande did not respond to a request from AFP for comment.

- 'Biggest test' -

"Evergrande's collapse would be the biggest test that China's financial system has faced in years," said Mark Williams, chief Asia economist at Capital Economics.

Yet "markets don't seem concerned about the potential for financial contagion at the moment," he said, adding "that would change in the event of large-scale default", which would likely prod the central bank to step in and buttress the teetering developer.

"The most likely endgame is now a managed restructuring in which other developers take over Evergrande's uncompleted projects in exchange for a share of its land bank."

The pictures of angry investors outside the firm's headquarters could also cause alarm in Beijing, where leaders are keen to keep a lid on any form of social unrest.

Evergrande has already sold stakes in some of its wide-ranging assets and offered steep discounts to offload apartments, but still reported a 29 percent slide in profit for the first half of the year.

The developer was founded in 1996 by Xu Jiayin, who went on to become China's richest man during the country's property boom of the 1990s.

He poured money into mass developments in new cities, raising $9 billion in Evergrande's 2009 IPO in Hong Kong.

A year later, Xu bought a struggling football team and renamed it Guangzhou Evergrande, lavishing millions of dollars on salaries for its stars.

Evergrande started to falter under the new "three red lines" imposed on developers in a state crackdown in August 2020 -- forcing the group to offload properties at increasingly steep discounts.

Evergrande dream turns to nightmare for Chinese property buyers
Shenzhen, China (AFP) Sept 14, 2021 - Sleepless nights are now the routine for Ji Wenchen six months after she laid out $100,000 for a deposit on a new apartment that is yet to be completed by China's rattled property giant Evergrande.

She handed over the cash to the sprawling conglomerate in March but is yet to receive documents showing she owns the apartment.

"I can barely eat or sleep these days," the 30-year-old told AFP.

"My name has not been written on the apartment -- that means, Evergrande has not handed over my money to the local government. As a rule, it should be filed within one month."

Ji is one of tens of thousands of ordinary investors, whose financial futures are pegged to promised windfalls from Evergrande, China's largest developer whose bullish expansion into 280 cities was driven by a $300 billion debt binge that has left it teetering.

Analysts Capital Economics estimate Evergrande has some 1.4 million properties that it has committed to complete -- around 1.3 trillion yuan ($200 billion) in pre-sale liabilities, as of the end of June.

But those developments and debt repayments have been cast into doubt as it has struggled to sell properties, meaning it does not have the cash to complete other projects to then sell.

It has also failed to offload assets including its Hong Kong headquarters.

On Tuesday, the company filed a statement to the Hong Kong exchange warning of the "tremendous pressure" it faces.

"There is no guarantee that the Group will be able to meet its financial obligations," the statement said, as the property giant sags under its colossal debts.

- Three red lines -

The housing group, which rode the investment wave of the 90s to capitalise on the country's wealth boom, is now struggling to meet metrics imposed by Beijing last year.

The "three red lines" set limits on borrowing and forced property developers to reduce their liabilities, following years where China let companies borrow heavily in order to expand.

Many offered attractive incentives to homebuyers to shift new-build properties.

But now complaints pepper Chinese social media from frustrated Evergrande investors whose apartments seem to have stalled.

One wrote that he had bought an apartment in a block in southwestern Kunming that was supposed to complete in August, but the building is still not finished and the construction site is empty.

Dozens of protesters gathered outside the company's headquarters in Shenzhen on Tuesday, including investors and contractors.

The anxious groups crowded in front of the building's entrance as police were deployed to maintain order, according to AFP reporters at the scene.

"Our boss is owed over 20 million yuan ($3.1 million), and many people here are owed even more," one Shenzhen protester, who gave his surname only as Chen, told AFP.

Owning property has become an important social marker of wealth in China, and is often considered a requirement for a man before getting married.

"I'm worried about my apartment -- it was supposed to be delivered before 31 October according to the contract," Kevin, a buyer in Jiozuo, central Henan province, told AFP.

"But I asked Evergrande a few days ago, and they said it may be delayed because they don't have enough workers. I don't have any other choice but just to wait."

- 'I believed Evergrande' -

But stabilising the market has become a key aim of Chinese President Xi Jinping, under the motto of "housing is for living, not for speculation".

The sector is of vital importance to the economy, and with millions of families tying up their wealth in property ownership experts have warned of potentially dire consequences if house prices drop below the cost of mortgages.

Evergrande's woes come as authorities crack down on a range of corporate giants, including many listed home-grown conglomerates, sending shivers through stock markets as investors lose confidence in China's private sector.

Meanwhile, some analysts warned the government has little incentive to rescue Evergrande, particularly as Beijing tightens up on what it sees as excessive wealth and runaway spending.

Capital Economics predicted that, in the event the group implodes, Beijing would prioritise buyers like Ji to prevent the economic blow morphing into social anger.

But it means anxious days lie ahead for buyers who have piled life savings into new apartments.

Ji is just hoping to get the money back -- a downpayment gifted from her parents to help her onto the property ladder, in eastern Jiangxi province -- but fears it will be difficult.

"When I bought this apartment I believed Evergrande," she said.

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