Evergrande redeems $16b bonds early

Business | Victor Zhong 19 Jan 2021

Mainland developer China Evergrande Group (3333) announced yesterday it would use HK$16.55 billion of internal funds to redeem HK$16.1 billion convertible bonds due in 2023 and pay related accrued interest in advance on February 10.

This came after the debt-ridden developer reported a balance of interest-bearing indebtedness of 716.5 billion yuan (HK$855.51 billion) as of end-December 2020.

The company had previously issued HK$18 billion 4.25 percent convertible bonds in 2018, due in 2023 and had used HK$1.807 billion to buy back part of these bonds and pay the interest in December 2020.

All the redeemed convertible bonds will be canceled.

"The company's arrangement of over HK$18.352 billion of its own funds for early repayment of principal and interest within a short period of time has fully demonstrated the cash strength and sound financial management ability of the company," it said in the announcement.

The announcement also pointed out that "the company is confident that it will accomplish its goal of reducing interest-bearing indebtedness by 150 yuan billion in 2021."

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