Chinese authorities have reportedly told major lenders to Evergrande not to expect upcoming interest payments on bank loans, in yet another sign of liquidity stress at the troubled property giant.
The Ministry of Housing and Urban-Rural Development told banks in a meeting earlier this week that Evergrande won’t be able to pay its debt obligations due on September 20, according to a «Bloomberg» report citing unnamed sources, highlighting that working capital is currently being used to resume construction on existing projects.
At least one principal payment next week will also be missed.
Guangdong officials have turned down at least one bailout request from Evergrande founder Hui Ka Yan, who also owns a controlling stake, the report added.
Restructuring Advisors
The reported meeting on the debt payment warning follows protests over the weekend from investors of Evergrande’s wealth management products throughout the country demanding repayment.
Last month, authorities also reportedly dispatched various financial advisers, accountants and other experts including a team from law firm and restructuring specialist King & Wood Mallesons to examine Evegrande’s finances.
