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Chinese real estate group Evergrande lets the payment deadline pass without comment


The ailing Chinese real estate giant Evergrande has failed to transfer due interest. On the stock exchanges, fear of a collapse of the 300 billion dollar group is increasing.

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Photo: Ng Han Guan / dpa

The worries about a collapse of the troubled real estate company China Evergrande are not ebbing.

The company let a well-publicized bond interest payment deadline pass without comment.

The price of the Evergrande share collapsed by eleven percent on Friday.

Experts are concerned that if it collapses, China's second largest real estate developer could trigger a financial quake, in China, but also worldwide.

Evergrande has more than $ 300 billion in debt.

The Chinese central bank again pumped money into the banking system to calm the nervous financial markets.

However, the government has not yet made any official commitments regarding possible state aid for Evergrande.

But that's exactly what investors hope for.

Evergrande employs millions of workers

The "Wall Street Journal" reported on Thursday, citing insiders, that the authorities in Beijing had asked the local government to prepare for a possible collapse of Evergrande.

The group itself has hired financial advisors to work out a restructuring.

Evergrande has financed its growth with debt for the past few years and is now in arrears with banks, bondholders, customers and employees. Several rating agencies downgraded the creditworthiness, stocks and bonds went into free fall. Social problems could also arise. 200,000 people work at Evergrande, and several million workers are hired for construction projects every year. In addition, many small investors have invested money in Evergrande financial products.

The Evergrande management promised to primarily want to pay out money to these investors.

Interest on a domestic bond was paid last.

The group has not yet commented on the interest of $ 83.5 million on an overseas bond that was due on Thursday and another $ 47.5 million in interest that would have to be paid next week.

A 30-day grace period now begins for Evergrande, after which it would officially be in default.

beb / Reuters

Source: spiegel

All business articles on 2021-09-25

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