Evergrande teeters on edge of default as $148 mln payment falls due | The Business Standard
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Sunday
May 28, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
    • GOVT. Ad
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
SUNDAY, MAY 28, 2023
Evergrande teeters on edge of default as $148 mln payment falls due

Global Economy

Reuters
10 November, 2021, 04:00 pm
Last modified: 10 November, 2021, 04:06 pm

Related News

  • China Evergrande mulls asset transfer to property unit for debt payment
  • Chinese developer Evergrande's unit ordered to pay out $1.1 billion
  • Timeline: Snowballing crisis at Evergrande
  • Explainer: What's next for China Evergrande after a restructuring proposal?
  • China Evergrande updates on offshore debt restructuring plan

Evergrande teeters on edge of default as $148 mln payment falls due

Evergrande, the world's most indebted developer, has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities

Reuters
10 November, 2021, 04:00 pm
Last modified: 10 November, 2021, 04:06 pm
A worker walks inside the construction site of a project developed by China Evergrande Group in Beijing, China September 22, 2021. REUTERS/Carlos Garcia Rawlins
A worker walks inside the construction site of a project developed by China Evergrande Group in Beijing, China September 22, 2021. REUTERS/Carlos Garcia Rawlins

Cash-strapped China Evergrande Group teetered again on the precipice of default as it faced a final deadline to make an offshore bond coupon payment on Wednesday, amid growing concerns about a liquidity squeeze in the property sector.

Evergrande, the world's most indebted developer, has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities, $19 billion of which are international market bonds.

The company has not defaulted on any of its offshore debt obligations. But a 30-day grace period on coupon payments of more than $148 million on its April 2022, 2023 and 2024 bonds ends on Wednesday. , ,

A failure to pay would result in a formal default by the company, and trigger cross-default provisions for other Evergrande dollar bonds, exacerbating a debt crisis looming over the world's second-largest economy.

There was no word from Evergrande on payment as of Wednesday evening Asia time.

The developer, which also has coupon payments totalling more than $255 million on its June 2023 and 2025 bonds on 28 December declined to comment when contacted by Reuters about its Wednesday payment deadline.

China's property woes rattled global markets in September and October. There was a brief lull in mid-October after Beijing tried to reassure markets the crisis would not be allowed to spiral out of control.

But concerns have resurfaced, with the US Federal Reserve warning on Tuesday that China's troubled property sector could pose global risks.

More developers are seeing their credit ratings slashed on their worsening financial profiles.

S&P Global Ratings said on Wednesday it had downgraded property developer Shimao Group Holdings' rating to "BB+" from "BBB-" over concerns that tough business conditions would hinder the company's efforts to reduce debts.

S&P considers a rating under "BBB-" to be speculative grade.

Worries over the potential fallout from Evergrande have also roiled China's property sector in recent days, slamming the bonds of real estate companies amid worries the crisis could spread to other markets and sectors.

Shares of developer Fantasia Holdings plunged 50% on Wednesday after it said there was no guarantee it would be able to meet its other financial obligations following a missed payment of $205.7 million that was due on 4 October.

Financing options 

Underlining the liquidity squeeze, some real estate firms disclosed plans to issue debt in the inter-bank market at a meeting with China's inter-bank bond market regulator, the Securities Times reported on Wednesday.

In the near future, real estate companies will issue bonds in the open market for financing, while banks and other institutional investors will assist via bond investment, said the paper.

Debt-laden developers including Evergrande and peer Kaisa Group have also been looking to raise cash to repay their many creditors by selling some of their property and other business assets.

Beijing has been prodding government-owned firms and state-backed property developers to purchase some of Evergrande's assets to try to control the fall.

Rising concerns about the developers' woes spreading to other sectors was visible on Wednesday as the spread, or risk premium, between lower risk, investment grade Chinese firms and US Treasuries widened to a more than five-month high. 

Once China's top-selling property developer, Evergrande narrowly averted catastrophic defaults twice last month by paying interest for its offshore bonds just before the expiration of their grace periods.

Despite the company's debt problems, its electric vehicles (EV) unit is pushing ahead with its business plan. The unit is seeking Chinese regulatory approval to sell its inaugural Hengchi 5 sport-utility vehicles.

China Evergrande New Energy Vehicle Group Ltd plans to sell HK$500 million ($64 million) worth of shares to fund production of new energy cars.

Shares in Evergrande ended up 3% on Wednesday, while stock in the EV unit closed the day 0.8% higher after having risen more than 2% earlier.

Founded in Guangzhou in 1996, Evergrande epitomised a freewheeling era of borrowing and building. But that business model has been scuttled by hundreds of new rules designed to curb developers' debt frenzy and promote affordable housing.

Any prospect of Evergrande's demise raises questions over more than 1,300 real estate projects it has in some 280 cities.

Top News / World+Biz / China

China Evergrande / Evergrande / China Evergrande anxiety resurfaces / China Evergrande crisis / China Evergrande Group

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Prime Minister Sheikh Hasina. TBS Sketch.
    PM Hasina credits peaceful democratic atmosphere for country's massive progress
  • Photo: Collected
    DSE turnover hits 134-day high on Sunday
  • 8th FYP: Why allocate more for transport and less for health, education?
    8th FYP: Why allocate more for transport and less for health, education?

MOST VIEWED

  • U.S. President Joe Biden hosts debt limit talks with House Speaker Kevin McCarthy (R-CA) in the Oval Office at the White House in Washington, U.S., May 22, 2023. REUTERS/Leah Millis
    Biden, McCarthy reach tentative US debt ceiling deal
  • People shop at a grocery market, in London, Britain May 6, 2023. REUTERS/Emilie Madi
    Brexit to blame for a third of Britain's food bill rise
  • The Belize-flagged general cargo ship Sormovskiy 121 is seen at the sea port in Chornomorsk after restarting grain export, amid Russia's attack on Ukraine, in Odesa region, Ukraine August 12, 2022. Press service of the Ministry of Infrastructure of Ukraine/Handout via REUTERS
    Black Sea grain deal slow to get moving after extension
  • U.S.President Joe Biden attends a meeting with Defense Department leaders in the State Dining Room at the White House in Washington, U.S. October 26, 2022. REUTERS/Jonathan Ernst
    Biden sounds hopeful on debt ceiling, Treasury warns of 5 June default
  • An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS/Todd Korol/File Photo
    Oil ticks up amid OPEC+ supply cut uncertainty
  • An LNG tanker in Futtsu, Chiba Prefecture, Japan. Photographer: Kiyoshi Ota/Bloomberg
    Poorer nations snap up cheap LNG in push to boost economies

Related News

  • China Evergrande mulls asset transfer to property unit for debt payment
  • Chinese developer Evergrande's unit ordered to pay out $1.1 billion
  • Timeline: Snowballing crisis at Evergrande
  • Explainer: What's next for China Evergrande after a restructuring proposal?
  • China Evergrande updates on offshore debt restructuring plan

Features

Unwinding poolside, she revels in self-care, her flawless complexion glowing under the gentle sun. Photo: Rony Rezaul. Model: Tangia Zaman Methila

Dive into Summer Style: Get Ready to Sizzle by the Pool

3h | Mode
Illustration: TBS

'Cybercriminals are creating new ways of hacking'

5h | Panorama
Under SmartMek’s package, farmers can have access to large agricultural machines such as combined harvesters.
Photo: TBS

SmartMek: Providing digitised services to the farmers through smart cards

6h | Panorama
Illustration: Bloomberg

AI will supercharge productivity. Will workers benefit?

4h | Panorama

More Videos from TBS

Temperature will surpass 1.5 degree by 2027

Temperature will surpass 1.5 degree by 2027

5h | TBS World
Dubai’s gigantic moon shaped mega resort

Dubai’s gigantic moon shaped mega resort

23h | TBS World
In an interview given to TBS Lt. Col. Mohammad Tajul Islam Chowdhury

In an interview given to TBS Lt. Col. Mohammad Tajul Islam Chowdhury

2d | TBS Stories
New US visa policy introduced to promote free and fair elections in Bangladesh

New US visa policy introduced to promote free and fair elections in Bangladesh

2d | TBS Today

Most Read

1
End of zero tax!
NBR

End of zero tax!

2
Photo: TBS
Energy

Wind power feeds national grid for first time Friday

3
Photo: TBS
Bangladesh

Private helicopter service launched in Ctg

4
Malaysian ship docks at Mongla port with 926 luxurious cars
Bangladesh

Malaysian ship docks at Mongla port with 926 luxurious cars

5
Nagad builds hope on Tk510cr bond, incurs Tk625cr loss
Economy

Nagad builds hope on Tk510cr bond, incurs Tk625cr loss

6
Cenbank prints Tk70,000cr new money in 11 months to support nat'l budget
Budget

Cenbank prints Tk70,000cr new money in 11 months to support nat'l budget

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]