Evergrande is the most-indebted property developer in the world. Its on-balance-sheet liabilities amount to nearly 2% of China’s annual GDP, and its off-balance-sheet obligations add up to as much as another 1%.
China Evergrande slipped toward a kind of limbo as time ticked away on an interest payment deadline which global markets are watching for signs of default, leaving investors on tenterhooks over the embattled property giant's fate.
The company has run short of cash to fund its $305 billion in debts and markets are worried that a collapse could pose systemic risks to China's financial system and reverberate around the world.
Last week Evergrande appointed financial advisers and warned of default and world markets fell heavily on Monday, though they have since stabilised. At its offices, furious small investors have protested to try and retrieve life savings sunk into its properties and wealth-management products.
Evergrande has promised to prioritise them and also resolved one coupon payment on a domestic bond this week. But it has said nothing about an $83.5 million offshore interest payment that was due on Thursday or a $47.5 million payment due next week.
Bondholders are losing hope and starting to think it might be a month or so before things become clearer.
Chinese regulators had asked Evergrande to avoid a near-term default, citing unnamed people familiar with the matter.
