(News Bulletin 247) – The Chinese real estate developer announced that its subsidiary Hengda Real Estate had not been able to pay a repayment of 4 billion yuan of bonds. Which constitutes yet another setback for the group which is painfully trying to restructure its debt.

The odds are piling up for Evergrande. The Chinese real estate developer with total liabilities of 2,390 billion yuan (or around 310 billion euros), according to Bloomberg, continued its fall on Tuesday on the Hong Kong Stock Exchange, with shares falling by 8.1 %.

The company’s stock is more than ever a penny stock, at 0.40 Hong Kong dollars.

The group this time announced that one of its subsidiaries, Hendga Real Estate Group, had defaulted on a bond repayment of 4 billion yuan, or around 520 million euros, which was due on Monday, reports Bloomberg. The company assured that it would actively negotiate with its bondholders to find a solution.

This announcement comes after Evergrande had already indicated on Monday that it was unable to issue new bonds, due to an ongoing investigation into this same subsidiary. Hengda Real Estate is the subject of suspicion from the Chinese authorities over breaches of financial reporting obligations.

A restructuring plan to be redeveloped

To make matters worse, the Chinese media Caixin indicated on Monday that two former managers of the company, the former general manager, Xia Haijun, and the former financial director, Pan Darong, had been placed in detention.

This comes as the group had to postpone a major meeting with its creditors on the restructuring of its debt, which was initially due to take place at the start of this week. The promoter claimed that he had to re-evaluate his proposal due to the poor performance of his sales which did not show the expected results.

“Planning and formulating Evergrande’s restructuring plans has required considerable work, but if the sales forecasts underlying the turnaround now appear unachievable, it is best to review the terms of the deal before the meetings are held. plan meetings,” Jonathan Leitch, a partner specializing in debt restructuring at law firm Hogan Lovells in Hong Kong, told Bloomberg.

Creditors could expect a “downward revision” of conditions and repayment periods could be further extended, believes Jonathan Leitch. The delay “creates further uncertainty and will further test the patience of bondholders,” he adds.