By Anne Marie Roantree and Andrew Galbraith
HONG KONG / SHANGHAI (Reuters) – Shares of heavily indebted China Evergrande group swung sharply on Thursday as the company looked set to miss its second bond interest payment in a week, as an additional $ 180 million in coupon maturities are looming next month.
Shares of the company opened sharply higher, rising to 5.21% before changing course to collapse to 7.17%. Evergrande Property Services Group fell 4.2% before cutting losses to 0.6% and China Evergrande New Energy Vehicle Group plunged to 19.4%. It last traded down 8.6%.
An offshore bondholder, who declined to be named due to the sensitivity of the matter, said his company had not received any information from Evergrande about the semi-annual interest payment of $ 47.5million dollars on its 9.5% dollar bond of March 2024 Thursday morning in Asia. .
Coupon payment was due September 29. It was not immediately clear whether payment could still be made during US hours.
With liabilities of $ 305 billion, Evergrande has raised fears that its woes will spill over into the Chinese financial system and reverberate around the world – a concern that has eased with the Chinese central bank’s promise to protect home buyers.
Once the best-selling developer in China and now set to undergo one of the largest restructurings ever in the country, Evergrande has favored domestic creditors over offshore bondholders.
While its main unit, Hengda Real Estate Group, announced the resolution of an onshore bond coupon payment on September 23 through “private negotiations,” Evergrande has remained silent on its offshore payment obligations.
“Regardless of how the debt is restructured, Evergrande shareholders and investors in USD-denominated offshore corporate bonds will suffer significant losses,” said Jing Sima, chief China strategist at BCA Research in a note.
Evergrande, which has nearly $ 20 billion in offshore debt, also missed an $ 83.5 million coupon payment on another bond last Thursday.
Coupon payments for September 23 and 29 have 30-day grace periods.
The company faces offshore coupon payment delays totaling $ 162.38 million and an onshore coupon payment of 121.8 million yuan ($ 18.84 million) by October 30.
($ 1 = 6.4641 Chinese yuan)
(Reporting by Anne Marie Roantree in Hong Kong and Andrew Galbraith in Shanghai; Editing by Christopher Cushing and Gerry Doyle)