The company is already too leveraged to avoid collapse. “This liquidity will help short term, but ultimately at this stage, a default or not is more a tactical decision before a likely restructuring,” says Michel Lowy, the CEO of asset management group SC Lowy, suggesting whether Evergrande alleviates some debts now rather than later is moot. “If you don’t pay the principal, then it’s a default.” “The note payment is more significant because it’s a return of the principal, not just the interest,” says Jeffrey Halley, a senior market analyst for APAC at OANDA. Evergrande missed interest payments on two large bond issuances in the last two weeks of September, but enjoys a 30-day grace period on those slipped bills.Įvergrande hasn’t confirmed the missed payment but, if correct, the note due Sunday would have a five-day grace period that is enacted only if administrative issues prevent the debtor from paying on time. The trading suspension also hit a day after Evergrande defaulted on a $260 million note, according to Bloomberg, which marked the group’s first full-blown default. Evergrande did not immediately return a request for comment on a possible Hopson deal. Shares in Hong Kong–listed Hopson were suspended Monday, too, pending an announcement. On Monday, China’s Global Times reported that Hopson Development Holdings would purchase 51% of Evergrande’s property services unit for $5 billion. The bourse operator said Evergrande had requested the share suspension in advance of “an announcement containing inside information about a major transaction” in the case of Evergrande’s main listed unit, and noted a “possible general offer for the shares of the Company” in the notice suspending trade for the property services group. HKEX halted trading in Evergrande’s core property development unit as well as the group’s property management subsidiary.
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