By Yongchang Chin
China Evergrande Group’s shares fell Monday, following a skill developer’s warning of probable cross-defaults on a dollar holds after it was asked to repay a US$260 million debt obligation.
“In light of a stream liquidity standing of a group, there is no pledge that a Group will have sufficient supports to continue to perform a financial obligations,” Evergrande pronounced in a matter late Friday.
The 30-day beauty duration for US$82 million of banking payments on onshore and offshore holds that were due Nov. 6 is also expiring, according to debt-research association CreditSights.
The Hong Kong-listed developer had requested assistance from a Chinese government, with a Guangdong provincial supervision promulgation a operative group to assistance a association conduct a risks.
The batch fell as most as 14% to HK$1.94, a lowest turn given May 2010. Shares were final down 12% during HK$1.97 by a midday break.
CCB International Securities pronounced a probable default “is not anything surprising,” adding that it expects comparatively singular contamination risks since of a now relaxation credit environment. “Most developers sojourn stable,” it said.
It combined that companies like Sunac China Holdings Ltd., Shimao Group Holdings Ltd., Agile Group Holdings Ltd. and KWG Group Holdings Ltd. could benefit, as a sector’s “darkest moment” passes amid easing credit conditions.
The Chinese supervision “appears rarely doubtful to bail out Evergrande,” U.S. bank Jefferies said. “Evergrande’s restructuring is a foregone conclusion, that is mostly approaching given stream bond yield.”
Write to Yongchang Chin during yongchang.chin@wsj.com
