Evergrande share rises strongly – uncertainty remains

Released on 23.09. 2021

  • Construction cranes are near an office building in the Evergrande New Housing Development Showroom. Photo: Andy Wong

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The situation at the Chinese real estate giant is tense. The company’s course is recovering. But investors are still waiting for news of whether interest payments are due.

Beijing (dpa) – The severely stricken Chinese real estate group Evergrande rose sharply on Thursday despite persistent fears of payment defaults on the Hong Kong stock exchange.

The Evergrande share ended trading with a plus of around 17 percent to 2, 66 Hong Kong dollars. At times the paper had even risen by over 29 percent.

According to observers, investors reacted to an announcement from the previous day, after which the group could get some breathing space. Evergrande announced on Wednesday that the company had agreed with creditors to pay interest on a bond traded in Shenzhen, southern China, which matured on Thursday. The Hong Kong Stock Exchange was closed on Wednesday for a public holiday.

The Chinese group has debts of the equivalent of more than 300 billion dollars. Investors fear a default. The corporation has to raise money to pay banks, suppliers and bondholders on time. In addition, Evergrande owes retail investors, including many employees, billions of dollars.

The fact that the company has still not provided any information on another offshore bond traded in US dollars caused continued uncertainty. According to calculations by the financial service Bloomberg, Evergrande had to pay an interest of 83, 5 million US dollars (around 71 million euros). Another interest payment of 47, $ 5 million is due on 29. September due. According to Bloomberg, a grace period of 29 days applies to both payments, which could give Evergrande more time.

As reported by Chinese state media, Evergrande boss Xu Jiayin tried again to allay fears in a special session on Wednesday evening. It has top priority to pay customers of investment products, said the CEO accordingly. Everything must also be done to resume the construction of unfinished apartments and to protect the interests of the owners.

A major Evergrande shareholder announced that it no longer intends to hold onto its stake. The Chinese Estates Holdings, the second largest shareholder of Evergrande, announced that shares are valued at 32 million dollars had already been sold. Later you want to completely separate from the shares.

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