Evergrande Agrees Deal to Avoid Default on Key Bond

Waiting on Beijing

Given the company’s liabilities, analysts and investors have speculated the government will likely step in with some kind of help for the corporate giant to prevent a damaging implosion.

But the vagueness of the filing — which did not give details on how much it would pay and when — left others warning the company remains deep in trouble.

The payment announcement “is likely only a temporary reprieve with no signals from the Chinese government over what steps, if any, it will take to assist an orderly wind down or restructuring,” said Jeffrey Halley, an analyst at OANDA.

While predominantly a developer, Evergrande — which employs 200,000 people, has a presence in more than 280 cities and claims to indirectly generate 3.8 million Chinese jobs — has been on a buying spree for more than a decade.

The company has hired experts including financial services firm Houlihan Lokey — which advised on the restructuring of Lehman Brothers when it went under during the global financial crisis — as it tries to avoid a collapse.