The Chinese real estate group China Evergrande Group says it has reached an agreement with domestic bondholders. This prevents the financially troubled group from defaulting on certain interest payments for now.
Evergrande is burdened with a debt load of more than 200 billion euros, and the company has to make repayments on loans and bonds this week. The threat of Evergrande’s bankruptcy is holding investors globally under its spell. The real estate developer is said to have failed to pay interest to at least two of its largest bank creditors, insiders said.
Hengda Real Estate Group, Evergrande’s main real estate unit, said on Wednesday that it would make an interest payment on Sept. 23. It concerns a loan with an interest of 5.8 percent that matures in September 2025. The amount owed is 232 million yuan, converted almost 30.6 million euros. The terms of the agreement were not clarified.
The company still has to pay 570 million euros in interest until the end of this year. That amount includes converted more than 71 million euros, which must also be paid on September 23. However, under the bond arrangements, there is a grace period of 30 days before a missed payment on that bond would become a default.
Chinese authorities, meanwhile, have begun laying the groundwork for what could be the largest corporate restructuring in the country’s history. Beijing has gathered accounting and legal experts to examine the group’s finances.