Evergrande’s shares rise upon reporting the payment of bond interest

Shares in Chinese real estate giant Evergrande opened 6% in Hong Kong after Chinese media reported making an interest payment before a crucial deadline.

The company missed a payment of $ 83.5 million (£ 61 million) last month, triggering a 30-day grace period that will expire on Saturday.

The company transferred the funds on Friday, a source told Reuters newswire.

Had the deadline been missed, Evergrande would have plunged into formal default.

News of the payment saw Evergrande’s stock recover from the steep decline the previous day, following news that a deal to sell part of its real estate services unit had failed.

Chinese real estate firm Hopson Development reportedly bought a 51% stake in the unit for $ 2.6 billion (£ 1.88 billion).

Both companies, however, confirmed that the deal was skipped after they were unable to agree on terms.

The latest payment is unlikely to allay long-term investor concerns.

If Evergrande actually made the bond interest payment today, it’s still only a short-term solution.

Another deadline for a second offshore bond payment worth $ 47.5 million (£ 34 million) looms next week.

Evergrande has more than $ 300 billion in debt that it seems increasingly unable to repay. The company’s total liabilities are approximately 2% of China’s gross domestic product.

The crisis has sparked fears that its potential collapse could send shockwaves across global markets.

It started last year when Beijing, worried about huge real estate debt, introduced new rules to control the amount owed by big developers.