Chinese real estate giant Evergrande avoids default

Published on : 11/11/2021 – 07:23

The ultra-indebted Chinese real estate developer Evergrande once again narrowly avoids a financial earthquake. The giant, whose potential bankruptcy could shake the national economy, managed to pay bond interest on time, thus avoiding default, Bloomberg reported on Thursday.

The markets reacted well to the news, the group’s share soaring more than 8% in the morning on the Hong Kong Stock Exchange.

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Evergrande is dragging a slate estimated at 260 billion euros. Its financial situation is being scrutinized with concern as its potential collapse could hamper China’s growth.

All eyes were on the promoter on Wednesday as he faced the deadline of a one-month grace period to make a bond payment in dollars – to the tune of 128 million euros.

But clients of the international clearing house Clearstream have received the expected money, said the Bloomberg agency Thursday, according to which two investors holding two of the bonds confirmed to have received the payments. Clearstream did not immediately respond to a request for confirmation from AFP on Thursday.

Sale of assets

Evergrande avoided several defaults in October, making interest payments at the last minute to bondholders abroad.

The group has been seeking for several months to offload assets in order to bail out.

He had thus succeeded a few days ago in raising 124 million euros by selling a stake in an Internet services company, HengTen Networks Group.

Determined to limit speculation in the sector, regulators have been tackling the excessive indebtedness of the country’s real estate companies for several months in order to limit the risks of a bubble bursting.

But the authorities now seem to be easing some of the pressure. The official business daily Securities Times reported on Wednesday that access to bank loans has been facilitated to make it easier for real estate companies to raise funds.

With AFP