Tuesday, June 25, 2024

China | Evergrande Group avoids default

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Maria Gill
Maria Gill
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(Beijing) Bloomberg reported Thursday that debt-laden Chinese real estate developer Evergrande, whose potential bankruptcy could shake the national economy, was able to pay bond interest on time, thus avoiding default.

Markets responded well to the news, with the group’s stake up 6.75% in the Hong Kong Stock Exchange at the close.

Evergrande draws a list estimated at 260 billion euros. Its financial condition is being scrutinized with concern, because its possible collapse could hamper the growth of the Asian giant.

All eyes were on the promoter on Wednesday as he faced the deadline for a one-month grace period for his dollar bond payment – to the tune of €128m.

On Thursday, Bloomberg said clients of Clearstream’s International Clearinghouse had received the expected funds, as two investors holding two of the bonds confirmed they had received the payments.

Clearstream did not immediately respond to a request for confirmation from AFP on Thursday.

Evergrande avoided several defaults in October, making last-minute interest payments to overseas bondholders.

The group had been seeking for several months to offload assets in order to salvage.

Thus, a few days ago, he managed to raise 124 million euros by selling a stake in the Internet services company, HengTen Networks Group.

Determined to curb speculation in the sector, regulators have been dealing with the over-indebtedness of the country’s real estate companies for several months in order to reduce the risk of a bubble bursting.

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But a series of articles in state media this week indicate that the authorities now appear to want to ease some of the pressure.

The official daily economic newspaper Securities Times On Wednesday, it reported that access to bank loans has been made easier for real estate companies to raise funds.

The China Securities Journal and the Shanghai Securities News Similar articles were published on Thursday, noting in particular, with central bank data to back it up, the increase in loans to real estate developers in October.

Analysts told state media that the new data showed some easing in real estate policies along with an increase in loans to individuals.

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