Evergrande in China Misses Bond Interest Payment Again... Stock Price Also 'Shaken'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The stock price of Evergrande (恒大·Hengda), China's second-largest real estate developer burdened with debt exceeding 350 trillion won and facing a default crisis, is fluctuating significantly on the Hong Kong stock market.

Following the missed payment on the dollar-denominated bond interest due on the 23rd, it has been reported that Evergrande also failed to properly pay the interest scheduled for the 29th, intensifying investor anxiety and impacting the stock price.

On the 30th, Evergrande shares were trading at 2.93 Hong Kong dollars, down 4.56% compared to the previous trading day as of 1:50 PM Korean time on the Hong Kong stock exchange.

On the same day, Evergrande's stock price opened 5.21% higher than the previous trading day but fluctuated sharply during the morning, dropping as much as 7.17% compared to the previous day.

The stock price of Evergrande's electric vehicle subsidiary, Hengda Auto, also plunged by up to 19.4% compared to the previous day before rebounding slightly, trading at a price down 8.06% from the previous trading day.

This stock price volatility occurred amid reports that Evergrande Group failed to pay $47.5 million (approximately 56.3 billion won) in bond interest due by the previous day.

Holders of Evergrande's dollar bonds maturing in 2024, with $47.5 million in interest payments scheduled, had not received any contact from Evergrande as of that day.

The market expects that Evergrande will ultimately fail to pay interest properly to investors.

BCA Research predicted, "Foreign investors holding Evergrande's dollar bonds are likely to suffer significant losses."

Previously, Evergrande reportedly failed to pay $83.5 million (approximately 99 billion won) in dollar bond interest to bondholders on the 23rd.

However, there is a 30-day grace period, during which if Evergrande pays the bond interest, it can avoid a default situation.

Nonetheless, with $180 million (approximately 210 billion won) in bond interest payments due next month, the consensus is that Evergrande's default crisis is intensifying.

Although Evergrande's default crisis is still ongoing, Chinese authorities have shown signs of restructuring Evergrande by announcing that a state-owned enterprise will acquire the shares of Shengjing Bank held by Evergrande. This has led to speculation that the possibility of a financial crisis caused by the Evergrande situation has decreased.

This content was produced with the assistance of AI translation services.