Jakarta, CNBC Indonesia – China’s central bank said the risk of spillovers from the crisis at property giant Evergrande could be controlled. This statement broke China’s silence on the property company’s debt problems.
“Local authorities are carrying out risk disposal and resolution work in accordance with the principles of the rule of law and marketing,” People’s Bank of China official Zou Lan told a briefing, according to a state news agency outlet. Xinhua, Friday (15/10/2021).
Zou’s comments come amid growing concerns that the cash crunch at Evergrande could weaken China’s economy.
The liquidity crisis comes as the country’s real estate sector is also under intense scrutiny. Regulators now announced limits for three different debt ratios in the “three red lines” scheme last year.
“In recent years, the company has been poorly managed, and can’t operate carefully according to the changing market situation,” Zou said.
“Instead, it diversifies and expands blindly, causing serious declines in operating and financial indicators, and ultimately a risk explosion,” he added.
Evergrande has debts reaching US$ 300 billion (Rp 4,290 trillion) with almost US$ 20 billion (Rp 286 trillion) being foreign debt. They missed the first payment of the US$47.5 million (Rp 679 billion) bond interest on September 23 for the 9.5 percent dollar bond in March 2024.
Furthermore, the company again missed coupon payments of US$ 83.5 million (Rp 1.19 trillion) on other bonds a week later, last September 30.
In total, to date the Chinese property giant has missed payments of up to US$281 million (Rp 4.02 trillion) on its foreign debt securities, and still has other obligations of US$ 573 million (Rp 8.19 trillion) that will fall. before the end of this year.
(Hi Hi)
– .
