Commercial Property

Evergrande stock hits new lows as investors brace for possible default

Peer Kaisa suspends shares as it too struggles with debt payment

A worker pusher a cart in front of a sign showing Evergrande Group’s China operation at a housing complex by the property developer in Beijing. Photograph: Noel Celis/AFP via Getty Images

Thomas Hale
Joe Rennison
Wed Dec 8 2021 - 16:46

Evergrande shares hit a new low on Wednesday on widespread expectations of an impending default. One of the Chinese developer's biggest peers also suspended its shares, as a months-long crisis in the country's embattled real estate sector comes to a head.

Shares of the world’s most indebted developer were down 5.5 per cent at 1.73 Hong Kong dollars (€0.15), their lowest level this year, one day after the end of a grace period for $82.5 million in interest payments from the company that bondholders said they had not received.

Uncertainty over the debt repayment was echoed in the case of Kaisa, the second-biggest borrower on international markets in China's real estate sector, which on Wednesday suspended trading in its shares a day after a $400 million bond matured without any sign of payment to investors.

One Evergrande bondholder overnight in New York said that they hadn’t been paid and that it had been “signalled” that a negotiation was under way.

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However, the group on Wednesday made no public update as to the status of the latest payment, which if missed could trigger an official default on the company’s debt that has been widely anticipated since August. S&P, the rating agency, said this week that a default from the world’s most indebted developer “looks inevitable”. – Copyright The Financial Times Limited 2021

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