Two Chinese developers are insolvent
Chinese giant Evergrande has failed to settle multi-million dollar obligations. Fitch has downgraded its rating to limited solvency
Evergrande Group had until December 6 to pay investors coupons on two series of dollar bonds. They total $82.5 million. Bondholders have reported that they have not received the money. The company made no announcement on the matter or responded to Fitch. As a result, Fitch downgraded the group and its two subsidiaries to “limited insolvency”.
Evergrande’s liabilities exceed $300 billion. S&P had already indicated a few days ago that the company’s insolvency was inevitable. The company itself said on Dec. 3 that it was not guaranteed to repay the debt as it began a restructuring process. Its bankruptcy would have dire consequences not only in China.
Another Chinese property developer, Kaisa, is also in big trouble. Its debt is $11.6 billion. On December 8th, the Hong Kong Stock Exchange suspended trading in the company’s shares. Reuter agency says it is the result of the company’s problems with repayment of $ 400 million in debt, maturing on December 7. The company’s shares have already lost 75 percent since the beginning of the year. S&P analysts said in November that Kaisa’s bankruptcy will be difficult to avoid.