Evergrande didn’t make payments due on some U.S. dollar bonds before a final deadline expired Monday, people familiar with the matter said, potentially setting the stage for a massive default and one of the country’s largest-ever debt restructurings
of his shares, moves that some creditors hoped were an indication that Evergrande was preparing to make its payment due Monday.
Evergrande has been working with local officials to restart construction stalled at many of its projects.A descent into default would make Evergrande the largest and highest-profile casualty of a government campaign to rein in China’s property sector after years of rapid, debt-fueled growth, which has already led several smaller developers to renege on their international obligations.
Beijing has also taken broader steps to offset the impact of Evergrande’s demise and the wider turmoil in the property sector. On Monday, China’s central bank said it would reduce the amount of money banks are required to set aside as reserves, freeing up funds for lending. Evergrande is now likely to engage with creditors to thrash out a restructuring plan. Investors will probably receive far less than face value for the debt they hold, recent market prices suggest. Some bondholders are working with the investment bankThe reorganization could be complex, given Evergrande’s size and international footprint.
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