China Evergrande Group, the second largest real estate company in China, said on its website. The company’s Wealth Management division paid 10% of its wealth management products, or WMPs, due today.
Evergrand said that the funds were transferred to investors’ accounts today.
However, Evergrande and large Chinese companies are heavily indebted. It has been raising funds in recent times by issuing high-yield WMPs to investors to circumvent the Chinese government’s stringent lending regulations.
Yesterday, Evergrande defaulted on its debt for the second time in two weeks, defaulting on interest payments on its $47.5 million debentures due yesterday. including defaulting on interest payments on $83.5 million in debentures due Sept. 23.
Evergrande also defaulted on interest payments to at least two creditor banks on Sept. 20.
Evergrande had commercial debt totaling 2057 billion yuan ($32 billion) at the end of 2020.
In addition, Evergrande has more than $300 billion in debt, or about 10 trillion baht, equivalent to 2% of China’s gross domestic product (GDP), after it borrowed money for years to support it. The expansion of China’s real estate sector
By InfoQuest News Agency (30 Sept. 64)