You are here: Home » International » News » Economy
Business Standard

China preparing for potential downfall of Evergrande: Report

Local governments have been tasked with preventing unrest and mitigating the ripple effect on home buyers and the broader economy, Wall Street Journal reported on Thursday

Topics
China | Evergrande

Reuters 

Evergrande
Residential buildings under construction are seen at Evergrande Cultural Tourism City, a project developed by China Evergrande Group, in Suzhou's Taicang, Jiangsu province (Photo: Reuters)

Chinese authorities are asking local governments to prepare for the potential downfall of debt-ridden Group, the Wall Street Journal reported on Thursday, citing officials familiar with the discussions.

The move has been characterised as "getting ready for the possible storm" by the officials, according to the report.

The officials said local-level government agencies and state-owned enterprises have been instructed to step in only at the last minute should fail to manage its affairs in an orderly fashion, the WSJ reported.

Local governments have been tasked with preventing unrest and mitigating the ripple effect on home buyers and the broader economy, the officials said, according to the report.

Evergrande, China's second-biggest property developer, has $83.5 million in dollar-bond interest payments due on Thursday on a $2 billion offshore bond and a $47.5 million dollar-bond interest payment due next week.

Both bonds would default if fails to settle the interest within 30 days of the scheduled payment dates.

The company, which epitomised the borrow-to-build business model, ran into trouble over the past few months as Beijing tightened rules in its property sector to rein back debt levels and speculation.

Investors are worried that a downfall could spread to creditors including banks in and abroad.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 23 2021. 17:24 IST
RECOMMENDED FOR YOU
.