The spillover effect of China Evergrande Group’s debt problems on the banking system can be controlled, a central bank official said on Friday, making rare official comments about the mega developer’s liquidity crunch that has rattled global markets.
Chinese authorities have urged Evergrande to step up asset disposals and resume projects, Zhou Lan, head of financial markets at the People’s Bank of China (PBoC), said at a press briefing, adding that individual financial institutions did not have a highly focused exposure on Evergrande. .
“In recent years, this company has not been doing and managing itself well. It has failed to conduct prudent operations in accordance with changing market conditions, and has blindly diversified and expanded its business,” Zhou said at the press conference in Beijing. Chinese officials and state media were largely silent. On the crisis at Evergrande, which has missed a series of bond interest payments and has $300 billion in debt.
Another Chinese developer, Xinyuan Real Estate Co’s, avoided defaulting on its outstanding dollar bonds on Friday, saying in a Singapore stock exchange filing that bondholders had agreed to an offer to accept new bonds and cash in exchange for the maturing bonds.
Xinyuan said more than 90 holders of each of the company’s $229 million bonds maturing October 15 have approved the exchange, which will see the delivery of new $205.4 million bonds and $19.1 million in cash.