China’s Evergrande Group is again on the brink of collapse, with pessimistic comments from the property developer raising expectations of direct state involvement and a managed debt restructuring.
According to Reuters, Evergande has made three 11th-hour coupon payments in the past two months and will again face the end of a 30-day grace period on Monday, with dues this time at $82.5 million.
But a statement late on Friday saying creditors had demanded $260 million and that it could not guarantee enough funds for coupon repayment prompted authorities to summon its chairman - and wiped over a sixth off its stock's market value on Monday.
Evergrande was once China's top-selling developer but is now grappling with more than $300 billion in liabilities, meaning a collapse could ripple through the property sector and beyond.
The central banking and insurance regulator and securities regulator also released statements, saying risk to the broader property sector could be contained.
Analysts said authorities' concerted effort signalled Evergrande has likely already entered a managed debt-asset restructuring process to reduce systemic risk.
