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Evergrande faces new loan deadline as property market troubles worsen

Evergrande faces new loan deadline as property market troubles worsen

Financial markets have been told to brace themselves for more disappointing news about China's crumbling property market as struggling behemoth, Evergrande, appeared ready to miss a new batch of loan repayments totaling $148 million, while another developer appealed for extra time to return the amount it owes.

China's second-largest property developer, Evergrande Group, missed two coupon payment dates totaling $131 million last month amid widespread fears of massive losses as the developer grapples with liabilities to the tune of $300 billion.

The projections of the firm making the semi-annual payments on the April 2022, April 2023, as well as April 2024 offshore bonds, due at midnight New York time on Monday (11th Oct), were minimal.

The business is expected to give higher priority to local Chinese creditors and finish the development of approximately 1.6 million houses, for which it has already accepted money but has not delivered.

The problems bedeviling Evergrande, which has stayed mute on its commitments to overseas bondholders, have sent severe shockwaves through global markets, as signs that the Chinese government might be prepared to see certain failures in the country's enormous property industry get stronger.

Meanwhile, possibility of further problems intensified after Hong Kong-listed construction firm, Modern Land (China), requested an extension of three-months on repayments on a $250 million bond, which is due on October 25th.

According to the firm's filing to the Hong Kong stock market at the start of the week, the Beijing-based company intends to delay maturity to improve its cash flow and liquidity management and also avoid any possible payment default.

The firm also announced that its chairman and president will offer loans to the amount of $124 million to help with the underwriting of the company's finances.

The firm, which is an investment holding firm that primarily deals in property investment and development, has seen the value of its shares drop by nearly half over the last six months, as widespread downward pressure wreaks havoc on the real estate market of China.

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Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.