China Evergrande shares fall for second day after unit misses bond payment

China Evergrande Group headquarters in Shenzhen

The logo of China Evergrande Group is seen at its headquarters in Shenzhen, Guangdong province, China, on September 26, 2021. Reuters/Eli Song/File Photo Get licensing rights

HONG KONG, Sept 26 (Reuters) – Shares in China Evergrande Group (3333.HK) fell for a second consecutive session on Tuesday, falling as much as 8% after a unit of the troubled property developer defaulted on onshore bond repayments.

Evergrande’s main domestic unit, Hengda Real Estate Group, said in a Shenzhen stock exchange filing late Monday that it has failed to pay principal and interest on a 4 billion yuan ($547 million) bond due Sept. 25.

The news comes after Evergrande said over the weekend it was unable to issue new debt due to Hengda’s ongoing investigation, causing Evergrande’s share price to fall 22% on Monday.

Hengda said it will actively negotiate with bondholders to reach a resolution as soon as possible while working to resolve credit risks and protect the rights and interests of creditors.

The missed payment is the latest blow for Evergrande, which has lurched from one crisis to another since the financial crisis became public in 2021 and it defaulted on its offshore debt obligations later that year.

Evergrande is seeking creditors’ approval for its proposals to restructure $31.7 billion of offshore debt that includes bonds, collateral and repurchase obligations.

Under the plan unveiled in March this year, Evergrande proposed various options to offshore creditors, including converting some of their debt holdings into new notes with maturities of 10 to 12 years.

($1 = 7.3102 yuan)

Reporting by Donnie Kwok; Editing by Sumeet Chatterjee and Edwina Gibbs

Our Standards: The Thomson Reuters Trust Principles.

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