Grace period for $15.4 million in bond interest ends on the 17th and 18th
As the grace period for interest payments on dollar bonds approaches for Chinese real estate developer Biguiyuan (Country Garden), which is in a management crisis, there are concerns that Biguiyuan may default on its debt due to its inability to pay bond interest. local time) foreign media reported.
According to foreign media such as U.S. economic media outlet CNBC and Hong Kong’s South China Morning Post (SCMP), the 30-day grace period for payment of $15.4 million (about 20.8 billion won) in interest on Biguiyuan’s dollar bonds will end on the 17th and 18th.
The exact end of the grace period is unknown. Previously, Biguiyuan failed to pay interest on dollar bonds by the original deadline of the 17th of last month.
Last week, Biguiyuan said it would not be able to meet all its offshore debt obligations, including U.S. dollar bonds, on time.
Biguiyuan’s admission of the possibility of default last week signals the start of efforts to restructure some of its $16.5 billion worth of offshore debt, SCMP reported.
It was also reported that Biguiyuan recently appointed China International Capital Corporation (CICC), US law firm Sidley Austin LLP, and US investment bank Houlihan Lokey as advisors to evaluate its capital structure and liquidity. In fact, it can be seen as preparation for restructuring due to default.
Previously, Biguiyuan was in danger of default after failing to pay $22.5 million (about 30.5 billion won) in dollar bond interest last August. At the time, Biguiyuan barely avoided default by paying interest, but one after another, other dollar-denominated bonds are facing interest payment dates.
Biguiyuan’s founder’s family reportedly provided the company with an interest-free loan worth $300 million to repay debt. Reuters also reported that the founder’s family was trying to sell their private jet to raise funds.
Source: Donga
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