Sinic Holdings has become the latest firm to be caught up in the downward spiral set off by Evergrande, the Chinese behemoth considered too big to fail by market analysts.
Fitch ratings downgraded Sinic today after it defaulted on its debt interest payment. The firm is uncertain to honour a $246m bond repayment due later this month.
The news came a day after the Chinese government suspended shares of Evergrande. According to Chinese media reports, a major transaction is afoot involving the real estate giant, which may shore it up and stabilize the market.
Sinic’s top boss Zhang Yuanlin lost more than a billion dollars in the market last month in a selloff triggered by Evergrande’s dwindling fortunes.
On Monday, Shenzen-based Fantasia Holdings too had failed to honor its $205.7 million bond repayment bringing down the Chinese home builders’ bond value by 50 per cent.
The series of defaults are due to an ongoing concern with a debt-smacked Evergrande.
Though there’s been no official word from the Chinese government of a bailout or a similar assistance, an interest by Hopson Development in buying 51 per cent of stake in Evergrande has kept investors’ hope up.
Overleveraged by billions, Evergrande has faced difficulties in paying interests on its debts after China brought laws to cap money owed by major real estate firms in the country.
Its predicament has sent shockwaves in the global market and jeopardized its investors and ancillary markets.