Key Evergrande Unit Misses $547m Bond Dues as Crisis Worsens

Evergrande has lurched from one crisis to another since its financial woes became public in 2021. Photo: AFP

China Evergrande Group’s main domestic unit missed an onshore bond repayment worth $547 million, signalling a worsening crisis at the world’s most indebted developer.

The unit, Hengda Real Estate Group, said in a Shenzhen stock exchange filing late on Monday it had failed to pay the principal and interest for a 4 billion yuan bond that was due by September 25.

The news came after Evergrande said on the weekend that it was unable to issue new debt due to an ongoing investigation into Hengda.

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The developments continued to weigh on the developer’s already battered Hong Kong-listed shares, which slipped more than 8% on Tuesday. Evergrande stock has shed more than 27% of its value in the two days of trade this week.

Hengda said it will actively negotiate with bondholders in a bid to reach a solution as soon as possible while working to resolve the debt risks and to safeguard creditors’ rights and interests.

The missed payment is the latest setback to hit Evergrande, which has lurched from one crisis to another since its financial woes became public in 2021 and it defaulted on its offshore debt obligations later that year.

Evergrande has been seeking creditors’ approval for its proposals to restructure offshore debt worth $31.7 billion that includes bonds, collateral and repurchase obligations.

Under the plan unveiled in March this year, Evergrande proposed various options to offshore creditors, including swapping some of their debt holdings into new notes with maturities of 10 to 12 years.

That debt restructuring plan, however, is “now stuck and can’t go any further,” due to the Hengda investigation.

Reuters with additional editing by Vishakha Saxena

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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has been working as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a stock market trader and investor, she is keenly interested in economy, emerging markets and the intersections of finance and society. You can tweet to her @saxenavishakha