A struggling Chinese real estate developer with $ 310 billion in debt is asking investors in one of its bonds to postpone when they will be repaid.
Evergrande Group will conduct a three-day online vote starting tomorrow for holders of the 4.5 billion yuan ($ 700 million) bond, according to an announcement made by the Shenzhen Stock Exchange in southern China. China.
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Evergrande, the world’s most leveraged real estate competitor, said the bond was due to mature in January 2023. It gave no indication of how long investors would be asked to defer repayment.
The company’s struggle to avoid defaults as it tries to comply with tighter official Chinese real estate sector borrowing limits has raised fears of a financial crisis. Chinese regulators have tried to reassure investors that the impact of a possible default can be contained.
Evergrande says he has 2.3 trillion yuan ($ 350 billion) in assets and 2 trillion yuan ($ 310 billion in debt), but he struggles to sell real estate and other assets fast enough to maintain payments to bondholders and other creditors.
Beijing appears to be trying to avoid bailout Evergrande to avoid sending the companies out as the ruling Communist Party tries to force them to reduce their debt.
Beijing tightened restrictions on developers last year as part of a campaign to curb rising corporate debt, seen as a threat to economic stability. The ruling party has made reducing financial risks a priority since 2018.
Small developers have gone bankrupt or defaulted on hundreds of millions of dollars in bonds.