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Evergrande default threatens China contagion
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Top Stories |
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IANS | 20 Oct, 2021
The rescue of embattled Chinese property company Evergrande appears to
have stalled, leaving the developer on the brink of default and
threatening to unleash contagion through the countrys giant real estate
sector, home prices and economy, The Guardian reported.
The
problems enveloping Evergrande, which has eyewatering total debts of
$305 billion, have hung over global financial markets in recent weeks
and helped curb China's post-pandemic recovery, the report said.
But
the crisis could deepen further if Evergrande fails to meet a deadline
of Saturday night to stump up a $83.5 million bond interest payment,
triggering an official default.
Evergrande has already been given
a 30-day grace period to make the repayment after missing the initial
deadline back in September. It has since missed other key offshore,
dollar-denominated bond payments worth another $193.3 million. The clock
is now ticking on those debts as well, the report added.
The
sprawling property-to-electric cars empire founded by former steel
executive Xu Jiayin in the mid-90s has been scrambling to offload assets
in order to pay back some of its loans. Its Chinese creditors are
expected to be prioritised, with foreign investors at the back of the
queue.
Shares in its main Hong Kong listing have lost 80 pert
cent in the past year and have been suspended since October 4 pending an
announcement on how it is going to be rescued.
But there were
signs that the process has not been running to plan, raising the
prospect that Beijing will be forced to engineer a dismantling of
Evergrande, the country's second-biggest developer, by absorbing most of
it into existing state-owned enterprises, the report said.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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