Evergrande: struggling firm to raise $1.5 billion as debt payment looms
The hugely indebted Chinese property giant Evergrande has missed interest payments to overseas investors for the second time in a week, reports say.
Some of Evergrande's bondholders say they have not yet received their coupon payments on $47.5 million in interest due from Evergrande Wednesday.
Once China's top-selling developer, the company is now facing debts of more than $300bn.
Evergrande expanded aggressively to become one of China's biggest companies by borrowing more than $300bn.
But after Beijing brought in new rules to control the amount owed by big real estate developers, Evergrande started offering its properties at major discounts to ensure money was coming in to keep the business afloat. Now, it is struggling to meet the interest payments on its debts.
Evergrande has reached a deal to sell to state-owned Shenyang Shenging Finance Investment group a 1.5 billion-share stake that Evergrande holds in Shenging Bank.
But even then if the deal happens, it still has debt payments coming due in October, in November and in December too. But $1.5 billion in cash should help it to meet those obligations in a timely manner. Moreover, the fact that it is a "state-owned bank" that is stepping in to buy Evergrande's bank shares suggests that the Chinese central government may be taking a more active role in helping Evergrande out.
Investors had better just cross their fingers and hope the government continues to do.