Chinese giant Evergrande is struggling to reduce its 2 trillion yuan ($310 billion) debt as the company fails to pay its borrowings prompting fear that might start a financial crisis.
Evergrande, a failing Chinese developer is having a hard time paying its multi-billion dollar debt which has affected global financial markets has paid $83.5 million this Friday to make an overdue payment to foreign bondholders, a report by a government newspaper agency.
Chinese giant Evergrande is struggling to reduce its 2 trillion yuan ($310 billion) debt as the company fails to pay its borrowings prompting fear that might start a financial crisis. To reduce fear among investors Chinese officials are trying to comfort by saying debt problems can be controlled and saying the debt issue will not cause any effect on the financial industry.
The company wired the money on Friday to a Citigroup account in terms of bond payment which was due September 23, a report mentioned by Securities Times, citing unidentified sources.
Real estate giant fails to pay its debt to investors in late September in US dollar-denominated bonds issued abroad. On Wednesday, the company said they have a 30-day grace period to make payments before it declared itself in debt defaults.
The Chinese government has been pressing the companies to reduce their debt levels for the long term.
Some economists say the government can resolve the issue of high credit if the real estate giant fails to pay its debts to Chinese banks and bondholders but the government is trying to hide the issue and avoiding bailout as it continues to force other companies to reduce reliance on debt.
China’s economic growth is unexpectedly low to 4.9 as real estate construction comes to a halt in the last three months ending in September. Experts say China’s economic growth is likely to decelerate if the financial curbs stay in place.
Published by– Money Control