Concerns were installed about the deepening liquidity crisis in the China property sector on Wednesday ahead of the deadline for the Evergrande China group who lacked money to make offshore bond coupons.
Evergrande, the most developer in the world, has stumbled from deadlines to the deadline in recent weeks because it wrestles with obligations of more than $ 300 billion, $ 19 billion in whom is international market bonds.
The company is not default on one of the obligations of offshore debt, but other $ 148 million bond payments must be carried out on Wednesday and have a total coupon payment of more than $ 255 million in June 2023 and 2025 bonds on December 28.
Beijing has encouraged government-owned companies and property developers supported by the state to buy some Evergrande assets to try to control the fall.
Although there is an Evergrande debt tribulation, an electric vehicle unit (EV) pushes ahead with its business plan.
This unit looks for the approval of China’s regulations to sell sports vehicles of Hengchi 5 Perdana.
China Evergrande New Energy Energy Group Ltd plans to sell shares worth HK $ 500 million ($ 64 million) to fund new energy car production.
The unit planned to sell 174.83 million new shares, or 1.76% of the stock capital that was enlarged, in HK $ 2.86 per share in the top-up placement, he said in the submission of the Hong Kong exchange.
Stocks in Evergrande little changed from the previous closher on Wednesday morning, while the EV unit rose 1.4%.
Concerns over the potential of the fall of Evergrande rocked the property sector of China on Tuesday, slamming a bond of real estate companies amid fears that the crisis can spread to other markets.
Slides in bond prices are only hours after the Federal Reserve U8 warns the Chinese troubled property sector can pose a global risk.
Underpointing Liquidity Extortion, several real estate companies revealed plans to issue debt in the inter-bank market at a meeting with the inter-bank bond market regulator, The Securities Times reported on Wednesday.
Chinese property misery shook the global market in September and October.
There was a short break in mid-October after Beijing tried to convince the crisis market would not be allowed to spiral out of control, but worries had reappeared.
Increasing concerns that the tribulation of developers spread to other sectors was seen on Wednesday as a deployment, or risk premium, between lower risks, Chinese investment companies and US treasury.
Founded in Guangzhou in 1996, Evergrande symbolizes the era of freewheeling borrowing and building.
But the business model has been fired by hundreds of new rules designed to curb debt debt developers and promote affordable housing.
Every prospect of Evergrande’s death raises more than 1,300 real estate projects that have around 280 cities.
Bank exposure to developers is also broad.