China Evergrande Group cut its plans to repay investors in its wealth management products on Friday, in a move that highlights the property developer’s growing liquidity shortage, which has been unable to meet its overseas debt obligations. .
Evergrande, whose $ 19 billion in international bonds have been deemed by rating agencies as cross-defaulted after the developer missed the deadline to pay the coupons earlier this month, failed to pay its maturities abroad to earlier this week.
The real estate company has been trying to get cash by selling assets and shares to pay its suppliers and creditors.
Evergrande said on Friday that each investor in its wealth management product could expect to receive 8,000 yuan ($ 1,257) a month as a principal payment for three months starting this month, no matter when the investment matures.
The firm, once the best-selling developer in China and now reeling under a liability of more than $ 300 billion, had not mentioned any amount before and had agreed to return 10% of the investment by the end of the month. , when the product expires.
It had also agreed to make follow-up payments to investors in the wealth management product every three months thereafter, until the debt Evergrande had to an investor was liquidated, state media reported earlier this year.
In a statement posted on the wealth unit’s website on Friday, Evergrande said the company will “actively fundraise” and update the repayment plan at the end of March. The company did not provide further details.
The situation is not “ideal,” according to the statement, as the firm’s equity unit tries to recoup capital from projects it previously invested in and therefore the original repayment plan was difficult to implement.