China-based Evergrande Group has become known as the most indebted real estate company in the world – but there may be some better news on the horizon
The real estate giant has managed to reach a last-minute deal, delaying a potential collapse that experts feared could spark a global financial contagion.
Evergrande, which is China’s second biggest property developer, has managed to rack up staggering debts which have totalled over $432 billion AUD.
On Thursday, interest payments on two Evergrande notes – worth tens of millions of dollars – were due – and if Chinese company failed to ‘make good’ – as many experts had predicted – fears escalated that the collapse would lead to a credit crunch.
That could have been a disaster for not just the Chinese economy, but global stocks too
However, just as the deadline loomed, the firm announced its main unit, Hengda Real Estate Group, had managed to reach an agreement which would allow it to make a coupon payment on its domestic bondholders on September 23.
While that has calmed concerns of an immediate collapse, the company could still end up defaulting later on, with the new deal essentially kicking the can down the road.
