Chinese investors in Evergrande relax despite default deadline – .

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Chinese investors in Evergrande relax despite default deadline – .


HONG KONG – For months, as a struggling real estate company called China Evergrande scared global markets with its financial woes, Beijing sat on the sidelines.

The government is now playing a more active role.

Evergrande, the world’s most indebted real estate developer, said officials from several state-backed institutions had joined a risk committee that would help the company restructure. The committee, chaired by Evergrande founder Xu Jiayin, “will play an important role in mitigating and eliminating future risks,” the company said in a document filed Monday evening.

The formation of a committee with an apparent government imprimatur reassured investors who had worried about the potential impact, in China and beyond, of a chaotic collapse of Evergrande. His huge real estate empire includes millions of apartments in hundreds of Chinese cities, but Evergrande also has over $ 300 billion in bonds he has to pay off – and maybe even more on the books.

“It looks like the government will intervene in one way or another to avert a full-scale crisis,” said George Yu, an economist at Renmin University in Beijing. “But all of society should learn a lesson from this incident. “

Evergrande appeared to have missed payments to some of its bondholders from an affiliate, Scenery Journey, which were due on Monday. But its shares rose in Hong Kong on Tuesday as investors reacted to news of official support for the company and broader measures to support a struggling real estate sector. Investors were also applauded by the Chinese government’s easing of credit restrictions on Monday amid signs of a wider economic slowdown.

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