Evergrande’s EV arm warns of cash crisis as property group misses payment deadline
Evergrande New Energy Vehicle Group’s capability to pay its workers and suppliers, as well as to manufacture cars, will be in jeopardy without a strategic investment or the sale of assets.
The parent company, whose debts have exceeded $300 billion, has been running short of cash, making investors nervous that its potential bankruptcy could pose huge systemic risks to China’s financial system that would reverberate across the world.Also on rt.com Evergrande execs redeemed investment products ahead of looming bankruptcy
Earlier this week, it missed a payment deadline on a dollar bond, providing no details as to the reason for that failure. That left investors anxious about incurring substantial losses when the cash-strapped company’s 30-day grace period ends.
Evergrande has made no comment about its $83.5 million interest payment, and its key property business had reportedly held private negotiations with on-shore bondholders to settle a separate coupon payment on a yuan-denominated bond.
Earlier this week, the People’s Bank of China once again injected capital into the country’s banking system to provide the necessary support for the markets. However, Beijing has still made no comment on Evergrande’s future. Its restructuring would be among the largest ever in China, with hopes for a swift resolution unlikely.Also on rt.com China’s cash-strapped developer Evergrande starts repaying wealth product investors with property
Last week, the real estate giant appointed financial advisers and warned of its impending default, sending global markets plummeting. If it collapses, it may well crush the property market, which accounts for 40% of household wealth in China.
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