Shares of China Evergrande Group edged up on Friday after the world’s most indebted developer secured a crucial approval from onshore bondholders to delay payments on one of its bonds as more developers race to avert defaults.
Struggling with $300 billion in liabilities, including $19 billion in international bonds deemed to be in cross-default, Evergrande is working to avoid a technical default onshore that would complicate its restructuring.
The firm reached an agreement with bondholders on Thursday to delay redemption and coupon payments for a 4.5 billion yuan ($707.52 million) bond which were due on January 8 by six months.
“The approval was expected; bondholders would not want to break up with Evergrande now because they hope the problem could be resolved eventually,” Kington Lin, managing director at Canfield Securities, said.
Shares of Evergrande had climbed 1.2% in late morning trade in Hong Kong, compared with a 0.2% decline in the Hang Seng Mainland Properties Index. At the close the firm’s shares were 0.62% up.
Its unit China Evergrande New Energy Vehicle Group jumped 9.83%.
- Reuters with additional editing by Jim Pollard
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