In the USA, the New York Times newspaper and the economic news agency Bloomberg stated that the company was saved from default in their news on the subject, while Reuters claimed the opposite.
The grace period for the company to pay its $148.1 million interest debt on three foreign debt bonds due expired on November 10.
Speaking to the New York Times, a bondholder announced that the company is making interest payments on two dollar-denominated bonds dated 2022 and 2023. The newspaper did not confirm that payment was made for the third bond dated 2024.
Bloomberg, on the other hand, reported that debt obligations were fulfilled for all three bonds, citing an international clearing house.
Clearstream, the clearinghouse, told the agency that its clients are being paid interest on the three-dollar bond that matures.
The news in question indicates that the company is avoiding default by paying its debt interests.
However, Reuters, in its news on the subject, argued that the company "officially defaulted" by failing to pay its bond debts within the tolerance period.
In the news, which alleged that some investors could not receive their payments even after one business day after the 30-day tolerance period, no information was provided on the identity of the borrowers.
Evergrande group of companies, one of China's largest companies and one of the world's largest investors in construction and real estate, failed to pay the interest on foreign debt bonds that were due in September and October.
While the Group could pay interest of $35.9 million on debt bonds due on September 23 to investors abroad, it could not make the interest payment of $83.5 million. In addition, he had not made the $47.5 million interest payment he had to make for the dollar-indexed bonds that were due on September 29.
The company failed to pay its $148.1 million interest debt on three dollar-indexed foreign debt bonds on October 12.
China owes 2% of GDP
With total assets of 2.38 trillion yuan (about $370 billion), the group has debt obligations of 1.97 trillion yuan (about $305 billion), which amounts to about 2 percent of China's Gross Domestic Product (GDP).
The fact that a company of this size has trouble even in small foreign interest payments is considered as a sign that a larger-scale debt crisis is at the door.
It is feared that the group, which has debts to 171 banks and 121 financial institutions in China, falls into payment difficulties, which may lead to a credit crunch across the country.
The government is trying to mitigate domestic debt risks by encouraging state-owned and publicly-supported construction companies to buy some of Evergrande's assets in exchange for debt obligations.
Evergrande said on September 29 that it had sold its stake in Shincing Bank, of which it is a partner in Liaoning province, to a state-owned asset management firm for approximately 10 billion yuan ($1.5 billion). The bank, which is also one of the company's largest creditors, stated that all the income will be used to pay off the company's loan debts.
On October 4, it was announced that Guandong-based Hopson Construction Holding is in talks to purchase 51 percent of the shares of Evergrande Real Estate Services, which is owned by the Evergrande group and listed on the Hong Kong Stock Exchange, for Hong Kong dollars 40 billion (approximately US$ 5.1 billion). .
The company is expected to take acquisition and transfer steps regarding its other assets in the coming months.
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