![]() The second bond payment was denominated in Chinese renminbi, and the company announced Wednesday that the debt had been “resolved through off-exchange negotiations” - though what exactly that means and how much the company actually paid is not clear. However, failure to make payment on the due date will be seen as a very bad sign by the financial markets. The agreement with creditors gives the company a 30-day grace period before it is officially considered to be in default. 23, 2021.Įvergrande had two major bond payments due Thursday. Residents pass near the headquarters for Evergrande in Shenzhen in southern China, Sept. Since July of 2020, the company’s share price has plummeted by 91%, to about 34 cents a share today. In addition to angry homeowners, the company is facing complaints from individual investors who have placed money in the company’s publicly traded shares. In some cases, construction has already been halted because the company has been unable to pay suppliers. Many of the projects are housing units for which individual buyers paid large sums of money in advance. The company has more than 800 construction projects spread across every province in the country, employing thousands of Chinese workers and engaging with an untold number of suppliers. The central government in China is concerned about civil unrest because of both the size and the nature of Evergrande. Evergrande is currently carrying a staggering load of more than $300 billion in debts and other liabilities. Chinese officials are bracing for a potential financial crisis as giant real estate conglomerate China Evergrande Group appears to be unable to make good on bond payments due on Thursday.Īccording to the Wall Street Journal, the central government has instructed local officials across the country to begin “getting ready for the possible storm,” if the firm is unable to come to an agreement with creditors.
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