Uncertainty Swirls Around China Evergrande as a Payment Deadline Passes

The possible collapse of property giant China Evergrande shook markets around the world earlier this week, but on Thursday, amid uncertainty over whether it met a critical payment deadline to its lenders, the market rallied, the New York Times reported. Evergrande’s Hong Kong listed shares, which have been on a firm downward trajectory, soared by a head-scratching 18 percent. Hong Kong’s broader Hang Seng Index rallied 1.2 percent. Investors are now taking bets on whether regulators in the world’s second largest economy will step in to save Evergrande, a corporate behemoth that has been struggling under the weight of more than $300 billion in debt. So far Beijing has remained tight-lipped while emphasizing that no Chinese company is too big to fail. In recent weeks, however, a steady flow of negative news from Evergrande has prompted panic and raised fears of a possible economic fallout from an Evergrande default. Unable to sell off parts of its corporate sprawl or raise fresh cash through the sale of new properties, Evergrande is also facing angry suppliers, home buyers and employees, some of whom have protested and demanded their money. Evergrande said in a vaguely worded statement on Wednesday that it had reached a deal with investors over a bond payment due for mainland Chinese bondholders, without giving any details. It offered no guidance on another payment on $83.5 million that was also due on Thursday for foreign bondholders. The company has a 30-day grace period before the missed payment would trigger a default, according to Bloomberg. Read more.