China developer Evergrande suffers second downgrade in two days

Embattled Chinese property giant Evergrande on Wednesday suffered a second credit rating downgrade in two days, raising fears the world’s most indebted company will default and sending its shares tumbling below their listing price 12 years ago. The Hong Kong-listed firm has run up a mountain of liabilities totalling more than $300 billion (€253bn) after years of borrowing to fund rapid growth and a string of real estate acquisitions as well as other assets, including a Chinese football team. But the firm has in recent years struggled to service its debts and a crackdown on the property sector by Beijing has made it even harder to raise cash, fuelling concerns it will go bankrupt. Many analysts warn such an event could have a serious impact on the world’s number two economy as the firm – which claims to employ 200,000 people and indirectly generate 3.8 million jobs in China – as it would go under leaving hundreds of firms out of pocket. Still, those worries were increased on Wednesday when Fitch cut its rating on the firm to CC, reflecting its view that “a default of some kind appears probable. We believe credit risk is high given tight liquidity, declining contracted sales,...