New Delhi: Chinese real estate giant Evergrande has started to repay investors in its wealth management business with property triggering fears over the economy of China. The development has sent global shockwaves as the world’s most indebted real estate developer faces a key test this week. Notably, the company’s share price was down in Hong Kong trade, according to media reports.Also Read - LIVE SA vs WI T20 World Cup 2021 Live Cricket Score, T20 Live Match Latest Updates: Both Teams Look to Get Back to Winning Ways
Major banks have reportedly been told that they won’t receive interest payments on loans that are due Monday, while interest payments of USD 84m on the firm’s bonds are also due on Thursday, as per an IANS report. Also Read - PAK vs NZ WC T20: Ex-New Zealand Great Ian Smith Warns Kane Williamson About Pakistan, Says 'The Bear is Angry'
Evergrande Default, Debt, Crisis Latest News
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- The property giant’s deepening debt problems have triggered fears over the impact its potential collapse could have on China’s economy. Evergrande grew to be one of China’s biggest companies by borrowing more than USD 300 billion, the report said.
- Last year, Beijing brought in new rules to control the amount owed by big real estate developers. The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat. Now, it is struggling to meet the interest payments on its debts, IANS reported.
- This uncertainty has seen Evergrande’s share price tumble by around 85 per cent this year. Its bonds have also been downgraded by global credit ratings agencies, the report said.
- The financial fallout would be far reaching. Evergrande reportedly owes money to around 171 domestic banks and 121 other financial firms,” the Economist Intelligence Unit’s (EIU) Mattie Bekink told the BBC, IANS report said.
- If Evergrande defaults, banks and other lenders may be forced to lend less.