Chinese promoter asks bondholders to postpone redemption

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BEIJING (AP) — A struggling Chinese property developer with $310 billion in debt is asking investors in one of its bonds to postpone their repayment date.

Evergrande Group will hold a three-day online voting starting Friday for holders of the 4.5 billion yuan ($700 million) bond, according to an announcement made through the Shenzhen Stock Exchange in the southern China.

Evergrande, the most indebted competitor in the global real estate industry, said the bond was due to mature in January 2023. It gave no indication of how long investors would be asked to defer repayment.

The company’s struggle to avoid defaults as it tries to comply with tougher official limits on China’s property sector borrowing has raised fears of a financial crisis. Chinese regulators have tried to reassure investors about the impact of a possible default that can be contained.

Evergrande says it has 2.3 trillion yuan ($350 billion) in assets and 2 trillion yuan ($310 billion in debt), but it is struggling to sell real estate and other assets quickly enough to maintain payments to bondholders and other creditors.


Beijing appears to be trying to avoid bailing out Evergrande to avoid sending the companies off as the ruling Communist Party tries to force them to reduce their debt.

Beijing tightened restrictions on developers last year as part of a campaign to rein in rising corporate debt seen as a threat to economic stability. The ruling party has made financial risk reduction a priority since 2018.

Small developers have gone bankrupt or defaulted on hundreds of millions of dollars in bonds.


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