Evergrande agrees deal to avoid default on key bond: company

23-Sep-2021 Intellasia | AFP | 5:02 AM Print This Post

Embattled Chinese housing giant Evergrande said Wednesday it had agreed a deal with domestic bondholders that should allow the conglomerate to avoid default on one of its interest payments.

Financial markets have tumbled over fears that the Chinese group could collapse, with the potential to derail the world’s second-biggest economy.

In a statement to the Shenzhen stock exchange, Evergrande’s property unit Hengda said it had negotiated a plan to pay interest due on its 2025 bond, which Bloomberg calculated was worth 232 million yuan ($35.9 million).

There was no mention of its repayments on interest for an offshore bond.

In the statement, Hengda said investors “who bought and held the bonds” before September 22, 2021 “are entitled to interest paid this time”.

While predominantly a developer, Evergrandewhich employs 200,000 people, has a presence in more than 280 cities and claims to indirectly generate 3.8 million Chinese jobshas been on a buying spree for more than a decade.

But the group has admitted facing “unprecedented challenges” as it tackles a debt pile of more than $300 billion.

In a report issued earlier this week, the S&P ratings agency said it believed authorities in Beijing would intervene if they considered any large-scale fallout was likely to materialise.



Category: China

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