Evergrande shares hit 6-week high as it again averts default with a payment

Shares of China Evergrande Group extended gains after the cash-strapped developer once again averted a destabilising default with a last minute bond payment this week

HONG KONG (Reuters) - Shares of China Evergrande Group extended gains to as much as 16% on Friday afternoon to the highest since Sept. 30, after the cash-strapped developer once again averted a destabilising default with a last minute bond payment this week.

As of 0703 GMT, the Hong Kong-listed company was up 12.25% at HK$2.84, compared with a 0.2% rise in the broader market. The stock has lost 80% so far this year.

Evergrande, the world's most indebted developer, has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities, $19 billion of which are dollar bonds.

The latest payments were made at the end of a 30-day grace period that ended on Wednesday, and were the third time in the past month the company has paid up perilously close to a deadline. The bonds had a total of more than $148 million due.

Evergrande has yet to pay the coupons of offshore bonds issued by unit Scenery Journey due on Nov. 6 worth a combined $82.49 million, which also have a 30-day grace period. It also has coupon payments totalling more than $255 million due on Dec. 28.

Bankers and analysts told Reuters that Beijing would stand firm on policies to curb excess borrowing by property developers even as it makes financing tweaks amid an industry liquidity crunch.

 

(Reporting by Clare Jim; Editing by Jacqueline Wong)