Home » Business » Start Paying IDR 1 Trillion Debt Installments, Evergrande’s Shares Go Up All

Start Paying IDR 1 Trillion Debt Installments, Evergrande’s Shares Go Up All

BEIJING, KOMPAS.com – The Chinese property giant who is experiencing a default case, Evergrande, has gradually begun to pay its debts which matured on September 23, 2021.

Payment is made in the last days of the 30 day grace period from the due date. It is known, Evergrande paid interest on bonds denominated in US dollars of 83.5 million US dollars or Rp. 1.16 trillion (exchange rate of Rp. 14,000).

Quotes CNBC, Sunday (10/24/2021), Evergrande shares closed up 4.26 percent after paying debts. This is because the payment of debt interest is more or less able to prevent widespread defaults.

Also read: Not Only Evergrande, More and More Chinese Property Developers Fail to Pay Debts

The Securities Times report explained that the interest payments on the debt were sent through Citibank to its investors, which were dominated by foreign investors.

In total, the second-largest property giant has missed another four bond coupon payments in September and October 2021.

In addition to the bond coupons maturing this September, there are other interest payments on US dollar-denominated bonds maturing in November-December 2021.

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Thus, Evergrande missed payments of at least US$279 million since last month, including the coupon due on September 23, 2021. Evergrande alone has a debt burden of more than 300 billion US dollars.

World worries

Evergrande’s mounting debt has sparked fear in global markets because it has the potential to have a ripple effect throughout China’s real estate industry.

Market fears were also triggered by the company’s failure to raise funds from the sale of some of its assets to pay off debt.

In talks earlier this month, management sold a 50.1 percent stake in Evergrande Property Services to Hopson Development Holdings.

But Hopson recently announced that the deal fell through. Whereas if successful, the deal is worth 20.04 billion Hong Kong dollars or 2.58 billion US dollars.

Another fear is that the projected coupon payments of domestic investors will be prioritized before foreign investors.

However, this eased after China’s central bank emphasized that property companies that have issued global bonds must actively fulfill all debt repayment obligations.

Also read: This is the Impact of the Evergrande Crisis for China, the US, and Europe

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