Evergrande default threatens China contagion

New Delhi, Oct 20 (SocialNews.XYZ) The rescue of embattled Chinese property company Evergrande appears to have stalled, leaving the developer on the brink of default and threatening to unleash contagion through the countrys giant real estate sector, home prices and economy, The Guardian reported.

The problems enveloping Evergrande, which has eyewatering total debts of $305 billion, have hung over global financial markets in recent weeks and helped curb China's post-pandemic recovery, the report said.

But the crisis could deepen further if Evergrande fails to meet a deadline of Saturday night to stump up a $83.5 million bond interest payment, triggering an official default.

Evergrande has already been given a 30-day grace period to make the repayment after missing the initial deadline back in September. It has since missed other key offshore, dollar-denominated bond payments worth another $193.3 million. The clock is now ticking on those debts as well, the report added.

The sprawling property-to-electric cars empire founded by former steel executive Xu Jiayin in the mid-90s has been scrambling to offload assets in order to pay back some of its loans. Its Chinese creditors are expected to be prioritised, with foreign investors at the back of the queue.

Shares in its main Hong Kong listing have lost 80 pert cent in the past year and have been suspended since October 4 pending an announcement on how it is going to be rescued.

But there were signs that the process has not been running to plan, raising the prospect that Beijing will be forced to engineer a dismantling of Evergrande, the country's second-biggest developer, by absorbing most of it into existing state-owned enterprises, the report said.

Source: IANS