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The developer’s latest comments raise hopes for direct state participation and debt-managed restructuring.
After a shake-up from time to time, the China Evergrande Group is once again the default, with pessimistic comments from the real estate developer raising expectations of direct state participation and a restructuring of managed debt.
After paying off 11 11-hour coupons in the last two months, Evergrand will face the end of its 30-day grace period again on Monday, this time with $ 82.5 million in fees.
But on Friday night, creditors demanded $ 260 million and could not guarantee enough funds to return the coupons, a statement urged authorities to call its president, and removed eight of them on Monday from the market value of his shares.
Evergrande was China’s best-selling developer, but is now dealing with more than $ 300 billion in liabilities, which could be caused by a collapse. property sector and beyond.
A statement from the company’s Guangdong province official said on Friday that a task force would be sent to Evergrande at the request of the developer to oversee risk management, strengthen internal control and maintain operations.
The central bank, banking and insurance regulator and securities regulator also issued statements saying it could pose a risk to the wider property sector.
The short-term risk of a single real estate company will not weaken the financing of the market in the medium or long term, the People’s Bank of China said. Home sales, land purchases and financing have “returned to normal in China,” he said.
Analysts say joint efforts by authorities have indicated that Evergrande is likely to be involved in a process of restructuring its already managed debt assets to reduce systemic risk.
Morgan Stanley said in a report that the process will lead to coordination between authorities to maintain the normal operation of property projects and negotiate with land creditors to secure financing for the development and completion of projects.
Regulators would also ease the debt restructuring debate after starting to stabilize business operations with offshore creditors, the U.S. investment bank said.
Evergrander’s November 2022 2022 bond – one of two bonds that could have been defaulted on non-payment on Monday – was trading at 20,787 US cents on Monday, compared to 20,083 cents at the end of Friday.
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