Evergrande Teeters On Default Anew; China Seeks To Contain Damage

China Evergrande Group shares slumped to a record low on Monday as authorities intervened to reassure markets after the heavily-indebted property developer warned on a coupon payment, pushing it closer to default, Clare Jim reported for Reuters.

Photo Insert: China's securities regulator insists that the recent default of Evergrande is an individual case, and has little impact on the market.

China's central bank said it would cut reserve requirements for banks while the politburo vowed to promote healthy development of the property sector, reinforcing previous messages to investors that Evergrande’s woes could be contained.

By cutting reserve requirements, China wants banks to lend firms like Evergrande with more cash.

Having made three 11th-hour coupon payments in the past two months, Evergrande again on Monday faced the end of a 30-day grace period, with dues totaling $82.5 million.

Its shares tumbled by 20% following a statement on Friday that said creditors had demanded $260 million and that it could not guarantee funds for coupon repayment, prompting authorities to summon its chairman.

As at the end of Asia business hours, two bondholders said they had yet to receive payments from Evergrande. Once China's top-selling developer, Evergrande is grappling with over $300 billion in liabilities, meaning a disorderly collapse could ripple through the property sector and beyond.

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