China Evergrande Group’s shares, listed as (HK:3333), witnessed a second consecutive day of decline on Tuesday, tumbling by as much as 8% after a subsidiary of the beleaguered property giant failed to meet an onshore bond repayment obligation.
Hengda Real Estate Group, the primary domestic unit of Evergrande, made an announcement via a filing on the Shenzhen stock exchange late Monday, stating that it had defaulted on the principal and interest payments for a 4 billion yuan ($547 million) bond that was due by September 25.
This development follows Evergrande’s announcement over the weekend, wherein it disclosed its inability to issue new debt instruments due to an ongoing investigation into Hengda, causing a substantial 22% drop in Evergrande’s share price on Monday.
Hengda Real Estate Group has expressed its commitment to actively engage with bondholders to expedite a resolution while diligently addressing debt-related risks and protecting the interests of its creditors.
The missed bond payment represents the latest setback for Evergrande, a company that has grappled with a series of crises since its financial difficulties were made public in 2021, leading to a default on offshore debt obligations later that year.
Evergrande has been actively seeking approval from creditors for its proposals to restructure offshore debt amounting to $31.7 billion, encompassing bonds, collateral, and repurchase obligations.
Outlined in its plan unveiled in March this year, Evergrande presented several alternatives to offshore creditors, including debt holdings swaps into new notes with maturities spanning from 10 to 12 years.
($1 = 7.3102 yuan)
