Evergrande Shares Rise on Building Pledge, But Default Looms

Shares in China Evergrande Group jumped more than 8% on Tuesday morning after the embattled property developer said it had made initial progress in resuming construction work.

Company chairman Hui Ka Yan (Xu Jaiyen in Mandarin) vowed in a meeting on Sunday to deliver 39,000 units of properties in December, compared with fewer than 10,000 in each of the previous three months.

Evergrande, grappling with over $300 billion in liabilities and at risk of becoming China’s biggest ever default, has been scrambling to raise cash by selling assets and shares.

The firm missed a deadline to pay offshore coupons worth $82.5 million earlier this month, threatening to trigger cross-default on its roughly $19 billion of international bonds.

Fitch and S&P downgraded Evergrande to “restricted default” and “selective default” respectively following the missed payment.

Evergrande has new coupon payments worth $255 million due today – Tuesday December 28 – for its June 2023 and 2025 notes.

As of 0200 GMT, Evergrande shares were trading up 7.4% at HK$1.59, a one-week high, while the Hang Seng Index eased 0.4%

Reuters with additional editing by Jim Pollard

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.