China’s Evergrande gets some breathing space for interest payments

Photo: VCG

The Chinese real estate group Evergrande, which is threatened with collapse, said it had gained some breathing space.

The company said on Wednesday it was able to reach an agreement with domestic creditors to pay interest on a bond due on Thursday.

A statement from the company said an agreement had been reached “in negotiations outside the market” for the repayment.

However, uncertainty was caused by the fact that Evergrande gave no details of another bond for which the equivalent of 83.5 million dollars in interest is due on Thursday. Another interest payment of 47.5 million dollars must be made on September 29.

All payments are subject to a 30-day grace period, which could buy Evergrande more time.

Evergrande has total debts of the equivalent of more than 300 billion dollars. Investors fear a default. The group needs to raise money to pay banks, suppliers and bondholders on time.

The head of Evergrande wrote to employees on Tuesday to encourage them. He was firmly convinced that the “darkest moment” could be overcome, board chairman Xu Jiayin wrote.

Evergrande will be able to fully accelerate the resumption of construction and production and achieve the main goal of handing over buildings to give a “responsible response” to homebuyers, investors, partners and financial institutions, he said.

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