Loan payment

Chinese real estate giant Evergrande due to repay loan in December


Leading Chinese real estate developer Evergrande is due to make a loan payment of $ 255.2 million in December today or remain in default.

Photo: Getty Images

Leading Chinese real estate developer Evergrande is due to make a loan payment of $ 255.2 million in December today or remain in default.

Struggling with its $ 300 billion in debt and interest payments, Evergrande intends to restructure all of its offshore government bonds and accumulated private debt. In recent months, Chinese regulators have eased restrictions on bond sales by real estate companies and introduced economic stabilization measures in 2022 through various monitoring tools.

Evergrande Chairman Hui Ki Yan stressed that Evergrande’s reclining model must be stamped out to quickly resume sales and debt repayment by 2025. Progress has also been seen, the company s ‘preparing to deliver 39,000 homes by the end of the year.

The recovery will always be difficult because earlier this year, Beijing introduced a “three red line” policy to ration credit to the real estate sector in order to mitigate financial risk in the Chinese real estate market. This policy shook Evergrande because it turned out to capitalize on an unsustainable economic model.

Expect Evergrande to miss today’s payment, continuing the default and increasing risk in the Chinese real estate sector. Likewise, real estate income represents a third of the Chinese economy and the crisis could lead to a recession.

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