Evergrande Group, a Chinese real estate and construction conglomerate, has now escaped default with its creditors, after it paid a coupon that expired nearly 30 days ago. If this time limit is exceeded – it will be reached over the weekend – then the company will enter the “virtual” terrain.
This voucher relates to the first Evergrande failure, in late September, which gave rise to all the concerns that had been raised about China’s debt-laden real estate sector. After that, the real estate company collected $ 83.5 million owed to creditors and the payment will be made until tomorrow, October 23, according to Bloomberg.
Markets welcomed the push, as shares of Chinese companies in the sector rose for a second day in Hong Kong. This year, Evergrande still has to pay four more debt issuances that it has implemented.
After the Evergrande case, many companies They were unable to make payments to creditors in dollars, increasing the risk of widespread default across real estate. sector is piling up 5 billion dollars in debt in the hands of investors, according to the estimates of the Japanese bank Nomura Holdings. The value is equivalent to the GDP of Japan, the third largest economy in the world.
The real estate giant saw shares drop in trading yesterday after a three-week hiatus. The first session coincided with the announcement of a 97% drop in real estate sales, usually during the peak of the real estate market, exacerbating the liquidity problem.
The price of the Chinese company fell by 14% in the Thursday session. During the period in which it was suspended, Beijing stock failed to pay two coupons to bondholders. The last one happened on October 12.
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