China Evergrande’s shares float as bondholders wait for payments

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A traffic light can be seen near the headquarters of the China Evergrande Group in Shenzhen, Guangdong Province, China, Sept. 26, 2021. REUTERS / Aly Song

HONG KONG / SHANGHAI, Sep 30 (Reuters) – Shares in the debt-laden China Evergrande Group (3333.HK) floated wildly Thursday as the company missed its second bond interest payment in a week as an additional $ 180 million in coupon- Deadlines are imminent in the next month.

The company’s shares opened significantly higher, rising as much as 5.21% before reversing and falling as high as 7.17%. Evergrande Property Services Group (6666, HK) fell 4.2% before reducing losses to 0.6%, and China Evergrande New Energy Vehicle Group (0708, HK) was down 19.4%. Most recently it was down 8.6%.

An offshore bondholder, unwilling to be named due to the sensitivity of the matter, said his firm had no information from Evergrande until Thursday morning about the biannual interest payment of $ 47.5 million on his 9.5% dollar Bond received in March 2024 in Asia.

The coupon payment was due on September 29th. It was not immediately clear whether the payment could still be made during the US hours.

With liabilities of $ 305 billion

Once China’s top-selling property developer and now likely the subject of one of the country’s largest restructurings, Evergrande has prioritized domestic creditors over offshore bondholders.

While its main entity, Hengda Real Estate Group, announced through “private negotiations” the decision on onshore coupon payment for bonds on September 23, Evergrande remained silent about its offshore payment obligations. Continue reading

“Regardless of how the debt is restructured, Evergrande shareholders and investors in offshore US dollar corporate bonds will suffer large losses,” Jing Sima, chief strategist for China at BCA Research, said in a press release.

Evergrande, which has nearly $ 20 billion in offshore debt, also missed a coupon payment of $ 83.5 million on another bond last Thursday. Continue reading

The coupon payments on September 23 and September 29 have a 30-day grace period.

The company has deadlines for offshore coupon payments of $ 162.38 million and an onshore coupon payment of 121.8 million yuan ($ 18.84 million) through October 30.

($ 1 = 6.4641 Chinese Yuan)

Reporting by Anne Marie Roantree in Hong Kong and Andrew Galbraith in Shanghai; Editing by Christopher Cushing and Gerry Doyle

Our standards: The Thomson Reuters Trust Principles.


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