Evergrande defaults on payment and electric car unit warns of lack of liquidity

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By Anshuman Daga, Andrew Galbraith and Tom Westbrook

SINGAPORE / SHANGHAI, China, Sep 24 (Reuters) – China Evergrande’s electric car unit warned on Friday that it faced an uncertain future unless it receives a quick cash injection, the clearest sign yet that the The property developer’s cash crunch is spreading to other parts of his business.

Evergrande owes $ 305 billion, has run out of liquidity and investors are concerned that its collapse could pose a risk to the Chinese financial system and have repercussions around the world.

The company missed the deadline for paying a dollar bond this week and its silence on the matter has left global investors wondering if they will have to bear large losses when a 30-day grace period ends.

China Evergrande New Energy Vehicle Group, for its part, said that without a strategic investment or asset sale, its ability to pay staff and suppliers and mass-produce vehicles would suffer.

Evergrande’s silence on the interest payment of $ 83.5 million this week contrasts with the way it treats its domestic investors.

On Wednesday, Evergrande’s main real estate company in China said it had privately negotiated with its local bond creditors to settle a coupon payment separate from a yuan bond.

“This is part of the tactic of any debt restructuring process where the sovereign is behind: keep people in the dark or guessing,” said Karl Clowry, a partner at Addleshaw Goddard in London.

“Beijing’s view is that overseas bondholders are mostly Western institutions, so it is justified that they are treated differently. I think people think it will still continue to fall.”

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