Evergrande onshore unit expects to pay bond interest on time


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An onshore unit of China Evergrande Group is set to make an interest payment on time on Thursday, offering the debt-ridden conglomerate a sliver of breathing room as it struggles to fix its capital structure and repair its global image.

The unit, Hengda Real Estate Group Co., will pay 232 million yuan ($35.9 million) of interest on its 5.80% September 2025 bond, it said Wednesday in a filing.

Investors have been watching Evergrande 3333, -0.44% closely, fearing that defaults from one of China’s biggest developers could create contagion risks and spell trouble for the wider market. Declining contracted sales, delayed asset-disposal plans and Beijing’s tight policy on the property sector all contributed to concerns about the company’s liquidity.

Last week, Evergrande said it has hired financial advisers, potentially moving it closer to a restructuring.

The turmoil has sent Evergrande’s Hong Kong-listed shares to multiyear lows, while its dollar bonds have recently traded at deeply distressed prices of about 25 cents on the dollar.

Offshore investors are waiting to see if Evergrande makes a coupon payment due on one of its dollar bonds this Thursday.

In a memo to employees Tuesday, Evergrande Chairman Hui Ka Yan said he expects the company’s troubles will pass and that it will deliver the homes it has promised.

Source: Marketwatch.com