The authorities in China have moved again to stanch the continuous flow of bad news from China Evergrande, the world’s most indebted real estate company. Late Thursday night brought news that China’s Financial Stability and Development Committee had approved plans for the company to renegotiate some of its loans with banks and creditors.
Although China Evergrande Group’s Hong Kong listed shares ticked up a notch on the news and closed nearly 2 per cent up for the day at Friday’s close, no one is in any doubt that this is only a temporary balm. Days earlier, Moody’s had downgraded the company for the third time in as many months, citing “weak recovery prospects” for creditors should the firm default.
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