China’s Crisis-Hit Firm Evergrande Clinches China Debt Deal

Evergrande’s main property unit has announced that it has reached a deal for a bond interest payment due Thursday. The domestic bond amount is $35.9 m.

Investors who are worried about the company’s debt crisis will be relieved by this announcement.

The world’s largest developer is due to make an $83.5m interest payment on an outgoing bond on Thursday.

Hengda Real Estate Group stated in a statement to the Shenzhen Stock Exchange that it reached an agreement over the repayment with holders of the Onshore Bond.

The statement did not specify how much interest would pay or when payments would be made. It stated only that the bond had been “resolved through private negotiations”.

Also, the filing did not mention an offshore bond.

The company is allowed a grace period of 30 days before defaulting on an offshore bond payment.

Global markets have been shocked by the company’s woes, raising concerns that it could be in serious trouble.

Evergrande is struggling to pay its debts exceeding $300 billion.

The company began to pay investors in its wealth management firm with property earlier in the week as it struggled for cash to meet its obligations.

Evergrande also missed interest payments Monday to at least two of its largest lenders.

Analysts have warned that failure by a large, heavily indebted property developer could have a significant impact on China’s economy and could spread to the global financial systems.

The Wednesday trade at the Shenzhen Stock Exchange was 0.7per cent less than Monday and Tuesday.

The annual Mid-Autumn Festival will see the Hong Kong Stock Exchange close on Wednesday.

(Adapted from DailyMail.com)

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