Relief for China's Evergrande as it secures extension on $260 million bondtext_fields
Struggling Chinese real-estate monolith Evergrande has managed to secure an extension on its defaulted bond of $260 million reported financial provider REDD. Last week, Reuters had reported that the company's plans to sell its Hong Kong headquarters for a whopping 1.7 billion dollars had fallen through as buyers were too worried about the financial crisis Evergrande was experiencing.
On Wednesday, Evergrande announced that it had also terminated a sales agreement that would have allowed rival Hopson Development Holdings Ltd. to purchase a 50.1% stake in the company. The rationale was that Hopson had failed to make an adequate offer, reasoning which Hopson denies. The setback also comes just ahead of the expiry of a 30-day grace period for Evergrande to pay $83.5 million in coupon payments for an offshore bond, at which time China's most indebted developer would be considered in default.
Worries that the impact of Evergrande's $300 billion in debt would spiral out of control has prompted the Chinese government to go into damage-control mode by assuring investors that it would not fail. China is already beset by manufacturing worries and coal shortages as industries try to creep back to pre-Covid levels of functioning, meaning that other parts of the world have been affected by shortages in food and fabric.