Evergrande avoids default with second bond payment

China Evergrande, the struggling real estate giant, made another debt payment before Friday’s deadline, avoiding a default for the second time in two weeks, according to one of the company’s bondholders.

The company made an interest payment that was due on September 29, the person said, speaking on condition of anonymity to discuss the matter. Evergrande had a grace period of 30 days for the payment of the deposit; overtime was due to end on Friday.

The company did not immediately respond to a request for comment on the payment.

The payment comes a week after the world’s most indebted real estate developer narrowly avoided defaulting on another bond. Evergrande paid $ 83.5 million in interest to bondholders last Friday, according to the Securities Times, an official gazette. This payment also took place just one day before a default. The interest payment due on Friday was $ 45.2 million.

Burdened with more than $ 300 billion in debt, Evergrande attempted to sell off parts of his vast empire to raise enough cash to pay off his creditors. Last week, one of those deals – widely seen as a lifeline of last resort – collapsed. Evergrande warned in securities filings that “given the difficulties, challenges and uncertainties” he faced in selling his assets, he could not guarantee that he would be “able to meet his financial obligations. “.

The company’s financial crisis is testing the resolve of Chinese officials who were quick to intervene to save struggling giants like Evergrande. They are committed to cleaning up China Inc.’s mountain of debt and ending the real estate industry’s excessive borrowing habits.

Yet if authorities let Evergrande fail, they could harm some of the more than one million Chinese buyers who have bought apartments from the company and are waiting for them to be built. A collapse could also hit construction workers and contractors waiting to be paid.

Alexandra Stevenson contributed reports.

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Elaine R. Knight