Evergrande Group continued to be under pressure with a deepening liquidity crisis for China’s real estate sector on Wednesday ahead of the deadline for making bond coupon payments.
Evergrande has passed the payment deadline for the past few weeks as it struggles with more than $ 300 billion in liabilities of which $ 19 billion is international market bonds.
The company has yet to breach any offshore obligations but an arrears of bond payments worth $ 148 million is due on Wednesday and it has coupon payments totaling over $ 255 million for June 2023 and 2025 bonds on Dec. 28.
A string of that Beijing has urged government firms and government -backed property developers to buy some of Evergrande’s assets to control the fall.
Meanwhile, China Evergrande New Energy Vehicle Group Ltd, which focuses on electric vehicle (EV) units, is seen continuing its business plan where the company plans to sell shares worth HK $ 500 million ($ 64 million) to finance the production of the EV.
The unit plans to sell 174.83 million new shares or 1.76% of the share capital at HK $ 2.86 per share.
Evergrande shares saw little change from Wednesday morning’s closing time while EV units were up 1.4%.
Concerns about the potential collapse of Evergrande have rocked China’s real estate sector on Tuesday as it has blocked the real estate company’s bonds decked out concerns that the crisis could spread to other markets.
Concerns are growing as developers see the spread or risk premium between Chinese investment firms and the U.S. Treasury widening to a high of more than 5 months.
Evergrande which has embarked on an era of independent lending and construction yet the business model has been hampered by hundreds of new rules created to curb the developer debt frenzy and promote affordable housing.
Any prospect of the fall of Evergrande raises questions about the 1,300 real estate projects located in 280 cities.
