On September 22, the stock price recovered slightly thanks to the last few minutes of interest payments. But the real test for Evergrande lies ahead. Those are 2 payments that are due, one of which is right on September 23.
Investors fear Evergrande will go bankrupt because of the huge mountain of debt, causing the collapse of both China’s real estate business and related industries such as banking, and then the entire market. .
Evergrande owes $305 billion, equivalent to 2% of China’s GDP.
According to the S&P report on September 20, it is unlikely that Beijing will save Evergrande.
Accordingly, Beijing is said to “will only intervene if there is a widespread contagion that causes major property developers to lose money and poses systemic risks to the economy”, and assessed that that “The failure of Evergrande alone is unlikely to lead to such an outcome”.
However, Evergrande Chairman Hui Ka Yan tried to downplay the seriousness of the debt. In a letter to employees on September 21, he emphasized that Evergrande will “step out of the darkest hour” and hand over real estate projects as committed.
Still, Evergrande’s investors remain anxious. The Chinese government has basically remained silent about Evergrande.