'Bankruptcy Crisis' Chinese Evergrande to Pay Interest on Some Bonds Due on 23rd

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] Evergrande (恒大·Ebeogeuraendeu), a Chinese real estate developer embroiled in bankruptcy rumors, announced that it will pay interest on some bonds maturing on the 23rd.

According to foreign media on the 22nd, Evergrande Group stated in a press release that it will pay the interest on the yuan-denominated bonds maturing in September 2025, traded on the Shenzhen Stock Exchange, on the 23rd as scheduled. The interest amount is reported to be 232 million yuan (approximately 42.5 billion KRW).

However, Evergrande did not mention whether it would pay the interest of 83.5 million dollars (about 99.3 billion KRW) on the dollar-denominated bonds maturing in March 2022, which is also due on the same day. On the 29th, the interest payment date for Evergrande's bonds maturing in March 2024 (47.5 million dollars) will arrive.

Regarding this, Bloomberg pointed out that "Evergrande issued an ambiguous statement, injecting new anxiety into the market." Evergrande said that “interest payments due on the 23rd were resolved through consultations with creditors,” but did not clarify how much interest would be paid or when it would be paid.

Bloomberg added, "Some analysts suspect that Evergrande agreed with creditors to delay interest payments to avoid default." Citing sources, Bloomberg also reported that Evergrande failed to repay loan interest due on the 20th to at least two banks.

Earlier, Bloomberg reported that the Ministry of Housing and Urban-Rural Development of China informed major banks in a meeting that "Evergrande will not be able to repay bank loan interest due on the 20th."

Industry insiders expect that Evergrande is already facing an extremely severe liquidity crisis, failing to properly pay construction fees to many partners, and that it will eventually default as it is blocked from repaying principal and interest on loans or bonds borrowed from financial institutions. However, according to bond contracts, failure to pay within 30 days from the scheduled date is not considered a default.