BEIJING – Embattled Chinese housing giant Evergrande today said it has agreed to a deal with domestic bondholders that should allow the conglomerate to avoid defaulting 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 has negotiated a plan to pay interest due on its 2025 bond, which Bloomberg calculated is worth 232 million yuan (RM150 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 today “are entitled to interest paid this time”.
While predominantly a developer, Evergrande – which employs 200,000 people, has a presence in more than 280 cities and claims to indirectly generate 3.8 million Chinese jobs – has been on a buying spree for more than a decade.
But, the group has admitted to facing “unprecedented challenges” as it tackles a debt pile of more than US$300 billion (RM1.25 trillion).
In a report issued earlier this week, the S&P ratings agency said it believes authorities in Beijing will intervene if they consider any large-scale fallout is likely to materialise. – AFP, September 22, 2021
