![]() ![]() Evergrande currently has about half that amount. When Lehman Brothers filed for bankruptcy in 2008, it had $617 billion in debt. A sudden dismantling without any outside aide will likely send disastrous rippling effects across the Chinese economy and global financial markets. Now, the ball is in their court to come up with some form of restructuring proposal,” Michel Löwy, CEO of Hong Kong-based SC Lowy, an investment firm that owns Evergrande bonds, told The New York Times on Thursday.Įvergrande employs more than 200,000 people in China and sustains 3.8 million jobs in related industries, according to its website. “We all expected that Evergrande was not going to be able to pull a rabbit out of their hat. The central bank has previously said Evergrande’s crisis is a consequence of “its own poor management and reckless expansion.” On Thursday, China’s central bank chief Yi Gang said the Evergrande meltdown is a “market incident which will be properly handled in accordance with the principles of marketization and rule of law,” suggesting that Beijing has no plan to interfere. But such a prospect looks increasingly unlikely. The company’s foreign bondholders, as well as many homebuyers in China who have paid for Evergrande apartments that are yet to be built, have been hoping for a government bailout. Some form of restructuring is to be expected. ![]() It’s unclear what Evergrande’s next step will be. Fitch said Evergrande had not responded to its request for confirmation about those payments. On Tuesday, Reuters reported that some of Evergrande’s overseas bondholders said they had not received coupon payments that were due on Monday. Since then, Evergrande has been increasingly quiet about whether and when it can pay interests on time, forcing the financial world to turn to bondholders and ask if they have received money. Its imminent trouble surfaced in September when the company said it had no cash to cover several upcoming interest payments on dollar bonds. Evergrande is one of China’s largest and most indebted property developers. ![]()
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