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KTFA
Samson » December 10th, 2021
Fitch confirms Chinese development giant Evergrande has stumbled for the first time
9th December, 2021
The credit rating agency, Fitch, announced Thursday that the giant Chinese real estate group Evergrande, which suffers from huge debts and worries financial markets, “defaulted” on its payment.
The group was supposed to pay $82.5 million on November 6, with an additional grace period that ended on Tuesday.
And Evergrande, which has debts of about $300 billion, is one of the largest real estate groups in China and employs two hundred thousand people, while its activity generates 3.8 million jobs in the country, according to the company. But the group, stifled by huge debts, has been struggling for several months to make interest payments and hand over apartments.
Observers have been following the group’s situation with concern for months, because its possible collapse could hamper the growth of the Asian giant.
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The rating downgrade reflects non-payment of obligations due on November 6 of the $645 million TNG bond, and other dues after the grace period expired on December 6.
The company, which has total liabilities of $300 billion, warned late Friday that it may not have enough funds to meet its financial obligations. “In light of the current liquidity situation, there is no guarantee that the group will have sufficient funds to continue to perform its financial obligations,” Evergrande said in a statement to the stock exchange. “We plan to actively participate” with external creditors in the restructuring plan, she added.
Evergrande faced an immediate test of its ability to repay creditors last Monday, December 6, 2021, after a 30-day grace period on interest payments on its dollar-denominated bonds expired.
Regulators also repeated earlier accusations that the company had run into trouble through a combination of poor management and blind expansion.
In the filing, Evergrande also said it had received a request from creditors to honor its pledge to guarantee payment of $260 million, adding that creditors may demand expedited payment if the company is unable to meet its debt obligations. LINK
Source: Dinar Recaps
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