Report: Evergrande makes overdue interest payment to boldholders

— AP pic

BEIJING, Oct 29 — Chinese property developer Evergrande averted default for the second time this month, Bloomberg reported, after making an overdue interest payment to offshore bond holders less than two weeks before a grace period expired.

The crisis at one of the nation’s biggest property developers has hammered investor sentiment, rattled the key real estate market and fuelled fears of a spillover into the wider economy.

The firm is reported to have missed a series of offshore bond payments and while it had a 30-day grace period on some of them, there had been a general expectation it would not be able to meet its obligations.

But it made a key payment Thursday, Bloomberg News reported citing sources close to the situation, with international bondholders of a 9.5 per cent dollar note told they had been paid.

The news will further soothe fears over the property giant’s future, after the company announced Monday it had restarted work on more than 10 projects in six locations.

Last week the state-backed Securities Times said the developer had wired US$83.5 million (RM346 million) for an overseas payment first due on September 23.

Chinese authorities have also told Evergrande founder Xu Jiayin — once the country’s richest man — to use his personal wealth to alleviate the company’s debt crisis, according to media reports.

Analysts warn the fundamentals of the company remain shaky, with several other dollar bond payments to navigate before the end of the year.

Evergrande plunged into crisis after Beijing began clamping down on the country’s colossal property sector — which some estimates say accounts for a quarter of the economy — in a bid to rein in excessive debt.

China now appears to be rolling back some of those regulations, however, with the Securities Times reporting Friday that local banks had begun easing some credit controls on homebuyers and developers in the wake of orders from the central bank. — AFP

Source: Malay Mail


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