Cash-strapped Evergrande missed interest payments due Monday | Business and Economy News
Money-strapped Chinese real estate developer Evergrande Group has missed interest payments to at least two of its biggest bank creditors, sources told Bloomberg.
China Evergrande Group failed to pay interest owed on Monday to at least two of its largest bank creditors, bringing the cash-strapped developer closer to one of the country’s largest debt restructurings.
Evergrande had not made the payments on Tuesday evening local time, people familiar with the matter said, asking not to be identified to discuss private information. Banks expected Evergrande to miss the deadline after China’s Housing Ministry told them the company would not be able to pay on time.
It is not known whether the banks will officially declare Evergrande in default. Some wait for the developer to come up with a loan extension plan before deciding on next steps, two people said. The next deadline for Evergrande’s closely watched debt arrives Thursday, when it has to pay interest on two bonds.
The real estate giant’s cash crunch has become a key focus for global investors. Risky assets plunged globally on Monday amid fears that a collapse of Evergrande could trigger financial contagion and dampen growth in the world’s second-largest economy.
While many Chinese observers predict that Beijing will take action to contain the fallout from the Evergrande crisis, the official silence on the fate of the company worries investors. Authorities could give signals of their desire to reduce systemic stress on Wednesday, when the People’s Bank of China resumes daily open market operations after a holiday break.
Evergrande, which has more than $ 300 billion in liabilities, did not immediately respond to an out-of-hours email request for comment.
Evergrande has borrowed about 572 billion yuan ($ 88.5 billion) from banks and other financial institutions, including trusts, nearly half of which is due in less than a year, according to its latest financial statements. . China Minsheng Banking Corp., Agricultural Bank of China Ltd. and Industrial & Commercial Bank of China Ltd. were among the company’s top banks at the end of last year.