China moves to reassure markets as Evergrande again nears default – Evergrande says no guarantee it can make $82.5 million of debt payments, and says creditors have also demanded $260 mln repayment. Authorities summon chairman; shares drop 20% to all-time low – Disorderly collapse could ripple through property sector.
China’s central bank said it would cut reserve requirements for banks while the politburo vowed to promote the healthy development of the property sector, reinforcing previous messages to investors that Evergrande’s woes could be contained.
Having made three 11th-hour coupon payments in the past two months, Evergrande again on Monday faced the end of a 30-day grace period, with dues totalling US$82.5 million.
Its shares tumbled by 20 per cent following a statement on Friday that said creditors had demanded US$260 million and that it could not guarantee funds for coupon repayment, prompting authorities to summon its chairman.
As at the end of Asia business hours, two bondholders said they had yet to receive payments from Evergrande. Evergrande declined to comment.
Its Friday statement was followed by one from authorities in its home province of Guangdong, saying they would send a team at Evergrande’s request to oversee risk management, strengthen internal control and maintain operations – the state’s first public move to intervene directly to manage any fallout.
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Read more about China moves to reassure markets at https://www.reuters.com/world/china/china-evergrande-shares-set-fall-71-after-it-says-no-guarantee-it-can-meet-2021-12-06/
