Chairman reiterates top priority is to help investors.
Evergrande shares rise as much as 32%, units gain, incrementing.
Fed Chair Powell says not a lot of direct US exposure is from the US government.
Investors, analysts recast threat of Lehman moment Recasts with chairman's comments, shares price HONG KONG SINGAPORE Sept 23 Reuters - Indebted property operator China Evergrande will make it a top priority to help wealth investors redeem their products, its chairman said, as investors await a key deadline for a dollar-bond coupon payment on Thursday.
Hui Ka Yan said the company was striving to ensure quality delivery of properties and stressed the importance of resume construction on developments where building had been halted.
His comments come as Evergrande, founded in 1996, faces mounting pressure from investors to quell anger among propertybuyers and retailers who have sunk their money into the group's properties or its wealth management products.
Evergrande shares, which plunged around 85% this year, jumped as much as 32% in resumed trade on Thursday after a public holiday, marking their biggest single day percentage rise since its listing in 2009.
The bounce was seen mainly as an reaction to the Wednesday announcement that an Evergrande Unit had resolved a coupon payment with creditors but this was just one of the hurdles the company faces as it labours under a $305 billion mountain of debt.
The group's electric vehicle and property services units climbed around 3% and 9%, respectively.
The chairman's comments late on Wednesday were clearly aimed at stabilising markets, but there seems to be not much information for bond holders, said a source familiar with the situation.
There is no clear plan as yet but we expect the debt to be restructured at some point, said the source who declined to be identified as he was not authorised to speak to the media.
Global investors have been on tenterhooks as the deadline looms, worried that the company's malaise could spread beyond the country s property sector and pose systemic risks to China's financial system.
Chinese Estates Holdings, the second largest shareholder of Evergrande, said on Thursday it had sold $32 million worth of its Evergrande stake and plan to exit the holding completely.
On Wednesday, global markets reacted with relief when the People's Bank of China infused 90 billion yuan $13.9 billion into the banking system and an Evergrande unit resolved a coupon payment on an onshore bond.
But it faces $83.5 million in $1 billion offshore bond interest payments due on Thursday on a $2 billion bond; And more installments are coming due next week with a $47.5 million interest payment due.
Evergrande, Beijing s biggest property developer, ran into trouble over the past few months as Beijing tightened regulations in its residential sector to curtail too much debt and speculation. It has found itself struggling to meet its debt obligations and investors worry that the rot could spread to creditors including banks in China and abroad.
Some analysts say it could take weeks for investors to see how the situation will resolve.
The company could liquidate its debts but still continue to operate, or it could restructure, wrote Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. In either case, investors in the company's financial instruments likely would suffer some losses, he wrote.
In the event of a liquidation, however, Chinese and global investors could decide that the contagion could spread beyond China, he added.
A group of Evergrande bondholders recently selected investment firm Kirkland Ellis and law firm Moelis Co as advisers to a potential restructuring of a tranche of bonds, two sources close to the matter previously said.
The advice focuses on around $20 billion in outstanding offshore bonds in the event of non-payment, one of the sources said at the time.
Analysts have been downplaying the risk that a collapse threatens a Lehman moment or liquidity crunch, which freezes the financial system and spreads globally.
Evergrande discussed with U.S. Federal Reserve Chair Jerome Powell on Wednesday that China's problems seem specific to America and that he did not see a parallel with the U.S. corporate sector
The problems with the United States are few and far between in terms of direct impact on us. The big Chinese banks are not tremendously exposed, but you would worry it would affect global financial conditions through global confidence channels and that kind of thing, Powell told reporters after the Fed's policy meeting.