Evergrande misses debt repayment, looks to restructure

Evergrande is China's second-largest developer by volume

Debt-laden Chinese property developer Evergrande has for the first time missed a deadline to repay some of its overseas creditors, a report said Tuesday, raising the prospect of it defaulting as it prepares for a government-backed mega-restructure.

As a 30-day grace period on $82.5 million in overdue coupon payments ended Tuesday, Bloomberg News reported some bondholders had yet to receive payment, citing sources.

The Chinese government sparked a crisis within the property sector when it launched a drive last year to curb excessive debt among Evergrande and other real estate firms.

Evergrande, with a debt pile of over $300 billion, is the most prominent firm to have buckled under the crackdown, but others have also suffered.

Evergrande has yet to comment on the bond repayments. 

After Evergrande said on Friday it may not be able to meet its financial obligations, the government summoned the company's founder and announced several moves that have given the clearest picture yet of Beijing's plans to end the crisis.

He added the regulators' comments suggest "global investors should take responsibility for their own decisions to invest in Evergrande's dollar bonds and the Chinese government will not provide a hard guarantee to indebted companies like Evergrande."

- 'Potential takeover' -

The working group is a clear sign of increased government control in the future of Evergrande, agreed Chen Long, partner at research firm Plenum.

"From an operational perspective... that working group will be in charge and will be making the most important decisions."

The restructuring -- which has yet to start -- could cover public bonds sold by Evergrande and unit Scenery Journey, as well as $260 million of notes issued by joint venture Jumbo Fortune Enterprises, Bloomberg said.

The central bank said Monday it would cut the reserve requirement ratio by 0.5 percentage points for most banks effective December 15, reducing the amount of cash they must hold in reserve and injecting 1.2 trillion yuan ($188 billion) into the economy.

bys/rox/jta/ssy

...