China Evergrande Group’s shares fall after it fails to pay offshore coupons

China Evergrande Group’s shares tumbled on Thursday after the crisis-hit real estate developer failed to pay offshore coupons due earlier this week.

Evergrande, whose $19 billion in international bonds are in cross-default after missing a deadline to pay coupons earlier this month, had new coupon payments worth $255 million due on Tuesday for its June 2023 and 2025 notes.

According to three sources with knowledge of the matter at hand, some bondholders holding the two bonds have yet to receive the coupons.

Both payments have a 30-day grace period.

Evergrande’s shares were down by 9.7% at HK$1.49 while the Hang Seng index was up 0.5%.

The fall in Evergrande’s shares has wiped out gains from earlier this week, when the market cheered the initial progress made by the firm in resuming construction work.

Earlier this week on Sunday, Evergrande’s Chairman Hui Ka Yan had vowed to deliver 39,000 units of properties in December 2021.

“(The non-payments) show Evergrande is still not doing okay even though it is delivering homes,” said Thomas Kwok, head of equity business of CHIEF Securities in Hong Kong while adding, “the market confidence in Evergrande and the China property sector is weak, as there could be more defaults with many bonds due in January”.

Evergrande has more than $300 billion in liabilities and is scrambling to raise cash by selling assets and shares to repay creditors and suppliers.

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