Shares in China Evergrande rose as much as 9.2% on Tuesday to a record high after China’s second-largest, but most-indebted, property developer announced plans to redeem all of its remaining perpetual bonds by the end of June. Evergrande announced in a statement late on Monday it had redeemed another Rmb24.4bn ($3.6bn) in perpetual bonds. The news saw Evergrande make more progress on its push to cut debt, which analysts have described as at dangerous levels, and costly to service, according to the Financial Times. “These were very expensive for Evergrande and most of the sellside [analysts] considered it debt,” said Raymond Cheng, a Hong Kong-based analyst at CIMB. “Redeeming them is positive from an interest-expense perspective.” By eliminating the high-yield debt, it could lower its net gearing ratio from about 430% to near 200% by the end of the year, Cheng said.
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