China tells local governments to prepare for a potential collapse of Evergrande - report
Beijing on Thursday asked local governments to prepare for a potential collapse of China Evergrande Group, according to a report from Dow Jones.
Earlier Chinese regulators called on the world’s most indebted property developer to avoid a near-term default on its dollar bonds and communicate more proactively with bondholders, Bloomberg reported. The company has 30 days to make the dollar bond payment before being labelled a defaulter.
Evergrande is due to make an interest payment on its offshore debt today.
The China government was said to be getting ready to nationalise Evergrande and split it into three separate companies to be folded into various state-owned enterprises, according to a story on Asiamarkets.com overnight.
Yesterday, Evergrande said it had agreed a deal over a Yuan bond payment due this week, with its main operating unit, Hengda Real Estate Group, with plans to make the payment today for an amount estimated to be just under US$36mln.
Local and global financial markets continue to be spooked about the potential fallout from a total collapse of the company due to the size and spread of its US$313bn of liabilities, with US$850mln of total coupon payments due this year.
However, Hong Kong’s Hang Seng index closed over 1% higher today, with the Shanghai Composite up 0.4%/
Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/961175/china-tells-local-governments-to-prepare-for-a-potential-collapse-of-evergrande---report-961175.html
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