No results.

close

On the brink, China's Evergrande will repay a small part of its debt

AFP

clock 2 min read

Construction cranes stand near an Evergrande new housing development showroom office building in Beijing, September 22, 2021.
AP Photo/Andy WongConstruction cranes stand near an Evergrande new housing development showroom office building in Beijing, September 22, 2021.

Financial markets waiting to see if Beijing will rescue real estate giant from bankruptcy

Threatened with bankruptcy, the Chinese real estate giant Evergrande announced Wednesday the payment of interest on a small part of its debt, but without reassuring the financial markets which are still waiting to know if Beijing will come to the aid of the private group.

The fear of seeing a repeat in China, the world's second-largest economy, of a Lehman Brothers-style scenario, whose bankruptcy precipitated the 2008 crisis in the United States and around the world, has plunged financial centers in recent days.

Video poster

All eyes are on the Chinese government, which has not specified whether it intends to intervene in favor of the conglomerate, crushed by some $305 billion in debt.

As the default threatens, the giant promoter announced Wednesday morning that it reached an agreement with bondholders on a small part of its debt.

In a press release sent to the Shenzhen Stock Exchange (southern China), the group said that one of its subsidiaries, Hengda Real Estate, had negotiated an interest repayment plan on a bond maturing in 2025.

According to the financial agency Bloomberg, Evergrande was supposed to honor a deadline of 232 million yuan ($36 million) Thursday on the bond at 5.8 percent limited to the domestic bond market.

Evergrande did not say exactly how much it was going to pay its creditors.