The liquidity crisis in the debt-ridden Chinese real estate development company Evergrand continues to negatively affect other units of the company.
Shares of Evergrande's electric car unit slid 26 percent today after it warned it faced an uncertain future unless cash was injected quickly, and also announced it was withdrawing from issuing RMB shares.
WARNING AFTER FRIDAY MARKET CLOSURE
The warning, which came after the market close on Friday, was seen as the clearest sign that the liquidity crisis at Evergrand negatively affected other units of the company.
Shares of the electric car unit China Evergrande New Energy Vehicle Group slid losses to 2.2 percent after falling as low as 1.66 Hong Kong dollars.
LOWEST LEVEL IN 10 YEARS
Evergrande shares, on the other hand, remained stable near a 10-year low last week, up 5 percent, while Evergrande dollar bonds were at levels described by investors as distressing.
EVERGRANDE MISSED PAYMENT
Evergrande missed its dollar bond payment deadline last week. The company's silence on repayments has raised the possibility that international investors will face huge losses once the 30-day grace period ends.
RISK OF EXPERIENCE OF GLOBAL CRISIS INCREASES
Although the concerns of a global crisis due to Evergrande's inability to repay its debts have eased somewhat, the company will face its next big test in the debt markets on September 29.
The company will need to make a coupon payment of 47 million 500 thousand dollars for the 9.5 percent dollar denominated bond with a maturity of March 2024.
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