Status: October 29, 2021 12:29 p.m.
The faltering Chinese real estate company Evergrande has apparently made an interest payment due today. This makes bankruptcy less and less likely.
The Chinese real estate developer Evergrande has apparently paid interest due on a bond and thus again averted an impending default. As the New York Times reported, citing a person familiar with the matter, the company made a coupon payment of $ 47.5 million that would have been due on October 29th – the loan period for this payment would be today expired. The Reuters agency also reports, citing insiders, that the company has paid the interest due today, Friday
Last week, the over-indebted real estate giant from Shenzhen in southern China was able to avert a costly payment default. Shortly before the expiry of a grace period, the group is said to have transferred $ 83.5 million for an offshore bond to an escrow account.
An entire industry in crisis
Evergrande is sitting on a total of around $ 300 billion in debt, and there is speculation about other off-balance sheet liabilities. Trading in the shares was suspended in early October. For months, the group has been trying to take action against the mountain of debt. For example, you want to bring in liquid funds by selling real estate or investments.
In view of the size of the liabilities, the financial markets have recently been worried that a collapse of Evergrande could trigger a conflagration in the Chinese real estate sector. Other Chinese real estate developers are also wavering, such as Modern Land and Fantasia. And the crisis is drawing ever wider circles: This week alone, the rating agency Fitch downgraded two companies in the industry, the Yango Group and the Kaisa Group, in their ratings.
Founder should use private assets
The reason for the difficulties in the Chinese real estate sector are new regulations by the Beijing government. A few months ago, she announced new guidelines designed to cool the overheated housing market in China. At the beginning of the week, Beijing once again made it clear that Evergrande and other indebted corporations would have to take responsibility for their payment obligations themselves. In addition, according to reports from the Bloomberg news agency, the billionaire founder of Evergrande was asked to use his personal fortune to overcome the crisis at the company.