China’s rich­est man built for­tune even as debt moun­tain climbed

Oman Daily Observer - - FRONT PAGE -

HONG KONG: Named the rich­est man in China on Thurs­day with a net worth of $43 bil­lion, prop­erty ty­coon Xu Ji­ayin (pic­tured) is likened by some me­dia to Don­ald Trump, hav­ing built his for­tune on a real es­tate busi­ness that has blos­somed un­der a moun­tain of debt.

The 59-year-old Xu’s China Ever­grande Group has a mar­ket value of $47 bil­lion, although its to­tal debt stands at more than $100 bil­lion, an is­sue that has prompted some wary in­vestors to short the stock.

Ever­grande, China’s sec­ond­most in­debted com­pany, has now pledged to cut its net debt ra­tio to around 70 per cent by June 2020 from 240 per cent and has raised $3.8 bil­lion in new funds and ex­changed $2.8 bil­lion of ex­ist­ing debt this year.

Thanks to a boom in the value of Chi­nese prop­erty as­sets, Xu’s wealth has climbed by $30 bil­lion in the past year to top the rich list com­piled an­nu­ally by the Hu­run Re­port.

Ever­grande, whose shares have surged 480 per cent this year, is now ranked as the coun­try’s third­largest devel­oper by sales.

The stock’s bull run to record highs ac­cel­er­ated this month, driven by plans for a back­door list­ing in main­land China and the an­nounce­ment of a tar­get to re­duce debt.

Xu’s po­lit­i­cal stock is also high with the rul­ing Com­mu­nist Party.

He is a mem­ber of the Chi­nese Peo­ple’s Po­lit­i­cal Con­sul­ta­tive Con­fer­ence, the top ad­vi­sory body. Ear­lier this year, Xu, in his ad­vi­sory role, pro­posed mea­sures to al­le­vi­ate poverty and hailed China’s pres­i­dent.

“We be­lieve that un­der the strong lead­er­ship of the Party Cen­tral Com­mit­tee with Gen­eral Sec­re­tary Xi Jin­ping as the core, we would cer­tainly win the bat­tle against poverty,” Xu said.

Xu grad­u­ated from Wuhan Univer­sity of Sci­ence and Tech­nol­ogy in 1982, and was awarded an hon­orary doc­tor­ate de­gree in com­merce by the Univer­sity of West Alabama in 2008.

He founded Ever­grande in 1996 and listed it in Hong Kong in 2009 after rais­ing around HK$6 bil­lion ($767 mil­lion) in an ini­tial public of­fer­ing.

Ac­qui­si­tion-hun­gry Ever­grande, which has de­vel­oped thou­sands of mid­dle class homes in China, made head­lines in 2010 when it bought the main soc­cer club in its home town of Guangzhou for 100 mil­lion yuan ($15 mil­lion).

In 2014, Xu sold a half stake in the club to China’s big­gest e-com­merce com­pany Alibaba for $192 mil­lion. Alibaba’s founder Jack Ma said at the time that he and Xu hatched the deal over din­ner and drinks, and wrapped it up in just a few days.

Xu came un­der a less friendly spot­light in 2015, when Aus­tralia or­dered him to sell his A$39 mil­lion ($31 mil­lion) Syd­ney man­sion as part of a crack­down on for­eign­ers whose buy­ing had con­trib­uted to an over­heated res­i­den­tial prop­erty mar­ket.

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