Chinese real estate companies propose to restructure debt and extend payment terms: sources

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BEIJING / HONG KONG, Oct.27 (Reuters) – Some Chinese real estate companies have suggested that regulators extend the maturity of their foreign bonds or undertake debt restructuring, sources said, as a growing number of defaults are shaking investor confidence in the sector.

The promoters presented the proposals on Tuesday, in a meeting with the National Development and Reform Commission (NDRC) and the State Administration of Foreign Securities (SAFE), said two sources with direct knowledge of the file that asked not to be identified. SAFE and NDRC did not respond to a request for comment from Reuters.

It was not immediately clear which companies put forward the proposals and what decisions regulators will take. However, the sources said regulators have asked companies – facing large overseas debt maturities – to assess their payment risks and report difficulties.

Regulators also called on companies present at the meeting to proactively prepare for repayment of principal and interest on their obligations abroad. In addition, he called on them to “maintain the collective reputation and order of the market,” the NDRC said in a statement released Tuesday evening.

The meeting highlights efforts by indebted construction companies and regulators to contain the consequences of future defaults by giant Evergrande China, amid growing concern over a liquidity crunch in the sector.

Evergrande, once China’s best-selling real estate company, is under the weight of $ 300 billion in liabilities, fueling concerns about the effect of a possible societal collapse on the second-largest economy. the largest and global markets in the world.

Evergrande narrowly avoided a costly default last week, raising $ 83.5 million in bond interest at the last minute, boosting confidence the company could avert a disorganized bankruptcy.

The construction group is due to find $ 47.5 million by Friday and has nearly $ 338 million in other overseas coupon payments due in November and December.

Strong concerns over China’s real estate sector, which accounts for a quarter of its gross domestic product, remain important to investors and the country’s financial authorities.

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