The conundrum for China's leaders is how to impose financial discipline without fuelling social unrest, since an Evergrande collapse could crush a property market which accounts for 40% of Chinese household wealth. APPOINTS ADVISERSĮvergrande appointed financial advisers and warned of default last week and world markets fell heavily on Monday amid fears of contagion, though they have since stabilised. So far, there have been few signs of stress in money and credit markets as well as other areas that would signal that the crisis was spreading beyond China. On Friday, police seized both the HNA chairman and its CEO. The liabilities of China's HNA group pale in comparison but its insolvency is still ongoing, with creditors seeking $187 billion, according to a source familiar the talks. we have to see in the next ten days or so, before China goes into holiday, how this is going to play out."Įvergrande is expected to be one of the largest-ever restructurings in China and hopes are not high for a swift resolution. "There's no precedent to this at the size of Evergrande. "These are periods of eerie silence as no one wants to take massive risks at this stage," said Howe Chung Wan, head of Asia fixed income at Principal Global Investors in Singapore. But authorities have been silent on Evergrande's predicament and China's state media has offered no clues on a rescue package. I think people think it's still a falling knife."Ĭhina's central bank again injected cash into the banking system on Friday, seen as a signal of support for markets. "The view from Beijing is offshore bondholders are largely Western institutions and so can justifiably be given different treatment. "This is part of the tactics of any sovereign-driven restructuring process - keeping people in the dark or guessing," said Karl Clowry, a partner at Addleshaw Goddard in London. On Wednesday, Evergrande's main property business in China said it had privately negotiated with onshore bondholders to settle a separate coupon payment on a yuan-denominated bond. The company missed a payment deadline on a dollar bond this week and its silence on the matter has left global investors wondering if they will have to swallow large losses when a 30-day grace period ends.Ĭhina Evergrande New Energy Vehicle Group (0708.HK), meanwhile, said without a strategic investment or the sale of assets its ability to pay staff and suppliers and mass produce vehicles would be hit.Įvergrande's silence on this week's $83.5 million interest payment contrasts with its treatment of its domestic investors. SINGAPORE/SHANGHAI, Sept 24 (Reuters) - China Evergrande's electric car unit warned on Friday it faced an uncertain future unless it got a swift injection of cash, the clearest sign yet that the property developer's liquidity crisis is worsening in other parts of its business.Įvergrande (3333.HK) owes $305 billion, has run short of cash and investors are worried a collapse could pose systemic risks to China's financial system and reverberate around the world. PBOC injects cash into banking system Evergrande shares fall.Company has 30-day grace period before the bonds default.Some bondholders have not been paid - sources.Evergrande misses payment deadline on dollar bond interest.
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