Beijing: A Chinese real estate developer trying to avoid defaulting on billions of debts on Wednesday calmed nervous global markets, at least for the moment, by announcing that it would meet a payment of interest scheduled for this week.
The Chinese government, meanwhile, did not clarify to investors whether it would intervene in the crisis.
The Evergrande Group's problems in complying with financial limits imposed by Chinese regulatory agencies to control debt levels have raised fears of a bankruptcy that could have effects around the world. Economists point out that if Evergrande restructures its $ 310 billion debt, banks and bondholders are likely to lose money, although Beijing has the resources to avoid a credit crisis in China.
The government wants to avoid the impression that it is agreeing to a bailout, and tries to force private companies to reduce their debt. However, it is likely trying to protect families who paid for apartments yet to be built, according to economists. That would create more losses for other creditors.
Evergrande, one of China's largest private conglomerates, said it would meet a payment due Thursday on a 4 billion yuan ($ 620 million) bond in Chinese yuan.
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The details "were agreed in off-market negotiations," the company said, without indicating whether that meant any change in payment. The bond carries an interest rate of 5.8%, which would bring the one-year instalment to 232 million yuan ($ 36 million).
Evergande did not provide information on possible future payments, such as the fee on a US dollar bond due in March.
AP
