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Evergrande: Crisis company from China misses another interest payment


It is the third payment default within three weeks: The crisis surrounding the Chinese real estate giant Evergrande is worsening. Liquidity bottlenecks also affect other companies in the industry.

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Evergrande Center in Shanghai (archive image)


The bad news continues: China's wavering real estate giant Evergrande has once again owed its bondholders due interest payments.

This increases concerns about a conflagration in the real estate sector, because a number of payment obligations will be due in the near future.

"We foresee further defaults if the liquidity problem does not improve significantly," said the brokerage firm CGS-CIMB.

Other property developers with weaker credit ratings are currently having difficulties with refinancing.

After Evergrande had already missed two interest payments in September, the group failed to meet new payment obligations on Tuesday, according to bondholders.

According to the information, coupon payments totaling $ 148 million were due for bonds with maturities in April 2022, April 2023 and April 2024.

At first, Evergrande did not receive any comments.

With the third payment default within three weeks, the chances that Evergrande will serve the creditors after the granted payment period decrease.

There is a grace period of 30 days for the interest due at the end of September.

The company is sitting on a mountain of debt of more than $ 300 billion.

Several real estate companies in trouble

In the course of the liquidity bottlenecks in the sector, other real estate companies in the People's Republic have already got into difficulties.

Recently, the smaller developers Modern Land and Sinic Holdings tried to be able to postpone deadlines for interest payments.

The rival Fantasia Holdings has already missed a deadline for interest payments.

Evergrande's debt problems have sparked global equity market concerns over the past few months.

The shares of the second largest housing construction company in China were suspended from trading a week ago on the Hong Kong stock exchange.

According to reports, the group is planning a multi-billion dollar stake sale.

"Many market participants are currently in a wait and see attitude," said Zhang Zihua, head of investment at Beijing Yunyi Asset Management.

"Investors are eagerly awaiting Beijing to take action to resolve Evergrande's debt problem, which would require extensive plans."

bam / Reuters

Source: spiegel

All business articles on 2021-10-12

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