Stocks and bonds in embattled property developer China Evergrade Group fell to historical lows, after China authorities increased their involvement in the company’s affairs and the company inched towards a reorganization of its massive offshore debt, reports The Wall Street Journal. Evergrande was also running up against a payment deadline, as it has done several times in recent months. The 30-day grace period on $82.5 million in interest payments from two sets of dollar bonds issued by Evergrande’s Scenery Journey unit ends Monday and failure to pay would trigger a default said Iris Chen, a credit analyst at Nomura.
On Friday, Evergrande warned it had been asked to pay $260 million under a debt guarantee, and said for the first time directly that it planned to work with offshore creditors on a restructuring.
Soon afterward, the government of Evergrande’s home province, Guangdong, said it would dispatch a working group to help the company with risk management. The central bank and several other Chinese regulators issued statements about Evergrande, stressing it was suffering from distinct challenges, and said they would work to keep the broader property market stable.