Shares of China Evergrande group fell on Thursday after the ailing real estate developer failed to pay off offshore coupons due earlier this week. Evergrande, whose $ 19 billion international bonds are in cross-default after missing a deadline to pay coupons earlier this month, had new coupon payments worth $ 255 million due Tuesday for his June 2023 and 2025 tickets.
At least some investors holding the two bonds have yet to receive the coupons, according to three sources familiar with the matter. Both payments have a 30 day grace period. Evergrande shares ended down 9.1% on Thursday, while the benchmark Hang Seng edged up 0.1%.
Bloomberg News earlier reported that the deadline had passed without any sign of payment from the developer. Evergrande’s decline on Thursday erased gains made at the start of the week, when the market applauded the company’s early progress in resuming construction.
Company chairman Hui Ka Yan pledged in a Sunday meeting to deliver 39,000 units of property in December, up from less than 10,000 in each of the previous three months. “(The non-payments) show that Evergrande is still not doing well, even if it delivers houses,” said Thomas Kwok, head of equities at CHIEF Securities in Hong Kong.
Market confidence in Evergrande and the Chinese real estate sector is low, as there could be more defaults with many bonds maturing in January, Kwok added. Evergrande has over $ 300 billion in liabilities and scrambles to raise funds by selling assets and stocks to pay off suppliers and creditors.
The fate of Evergrande and other indebted Chinese real estate companies has weighed on financial markets in recent months amid fears of spillover effects, as Beijing has repeatedly sought to reassure investors. (Edited by Richard Pullin, Stephen Coates, Shounak Dasgupta and Neil Fullick)
(This story was not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)