Beijing: China’s troubled asset giant evergrande State media on Friday said it made a major offshore interest payment a day before the weekend deadline, defaulting for now.
The crisis at one of the country’s biggest property developers, which is reeling under $300 billion in debt, has dented investor sentiment and fueled fears of a spillover in the broader economy.
Evergrande is reported to have lost at least $150 million in offshore bond payments, but in September agreed a settlement to pay interest on a domestic bond.
But on Friday, the state-backed Securities Times said the beleaguered developer had made an offshore payment of $83.5 million for the first time on Sept. 23, citing “relevant channels”.
It said bondholders would receive payment before Saturday – the end of the 30-day grace period.
Fears that Evergrande could collapse and send shockwaves through the Chinese economy have plunged buyers and markets, and stocks tumbled as the group resumed trading on Thursday after a two-week pause.
But on this news, the group’s shares were trading up about five percent in the open on Friday morning.
Evergrande began to falter under Beijing’s new “three red lines” imposed last year on developers in a state crackdown that banned real estate companies’ debt amounts.
In a statement this week, the Shenzhen-based group said it had made no progress on disposing of assets to raise capital, after a potential $2.58 billion deal to sell a 50.1 percent stake in its asset services arm fell through.
Beijing has insisted that any fallout is preventable, but the crisis has prompted rare public anger and protests from worried home buyers, suppliers and investors.
Officials have reportedly asked local governments to prepare for Evergrande’s possible collapse, while analysts have said local authorities have already taken control of some of its real estate projects.
“From a macro perspective, whether or not Evergrande’s dying husk survives is not important; what matters is who assumes which liabilities, or not,” leland miller, CEO of data analytics company china beige book, told AFP.
“It has been very clear from the beginning that a lot of pain is coming.”
The crisis at one of the country’s biggest property developers, which is reeling under $300 billion in debt, has dented investor sentiment and fueled fears of a spillover in the broader economy.
Evergrande is reported to have lost at least $150 million in offshore bond payments, but in September agreed a settlement to pay interest on a domestic bond.
But on Friday, the state-backed Securities Times said the beleaguered developer had made an offshore payment of $83.5 million for the first time on Sept. 23, citing “relevant channels”.
It said bondholders would receive payment before Saturday – the end of the 30-day grace period.
Fears that Evergrande could collapse and send shockwaves through the Chinese economy have plunged buyers and markets, and stocks tumbled as the group resumed trading on Thursday after a two-week pause.
But on this news, the group’s shares were trading up about five percent in the open on Friday morning.
Evergrande began to falter under Beijing’s new “three red lines” imposed last year on developers in a state crackdown that banned real estate companies’ debt amounts.
In a statement this week, the Shenzhen-based group said it had made no progress on disposing of assets to raise capital, after a potential $2.58 billion deal to sell a 50.1 percent stake in its asset services arm fell through.
Beijing has insisted that any fallout is preventable, but the crisis has prompted rare public anger and protests from worried home buyers, suppliers and investors.
Officials have reportedly asked local governments to prepare for Evergrande’s possible collapse, while analysts have said local authorities have already taken control of some of its real estate projects.
“From a macro perspective, whether or not Evergrande’s dying husk survives is not important; what matters is who assumes which liabilities, or not,” leland miller, CEO of data analytics company china beige book, told AFP.
“It has been very clear from the beginning that a lot of pain is coming.”
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