State Media reports that Evergrande has paid overdue interest on an offshore bond.

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State Media reports that Evergrande has paid overdue interest on an offshore bond.

State media reported Friday that China’s beleaguered property company Evergrande had completed a significant offshore interest payment a day ahead of a weekend deadline, preventing a default for the time being.

Investor mood has been crushed by the crisis at one of the country’s largest property developers, which is drowning in $300 billion in debt, fueling fears of a spillover into the wider economy.

Evergrande is said to have missed at least $150 million in offshore bond payments, but has agreed to pay interest on a domestic bond since September.

However, citing “relevant sources,” the state-backed Securities Times reported on Friday that the troubled developer had made a $83.5 million offshore payment due on September 23.

It stated that bondholders would be paid by Saturday, the end of a 30-day grace period.

Buyers and markets were startled by fears that Evergrande would fail, sending shockwaves through the Chinese economy, and shares fell when the company resumed trading on Thursday after a two-week hiatus.

On the other hand, shares of the company were up around 5% at the open on Friday morning as a result of the news.

Evergrande began to struggle under Beijing’s new “three red lines,” which limited the amount of debt that real estate businesses may take on as part of a state crackdown last year.

After a prospective $2.58 billion agreement to sell a 50.1 percent share in its property services unit fell through, the Shenzhen-based company stated in a statement this week that it has made no progress on asset disposals to raise funds.

Beijing has claimed that any negative consequences will be limited, but the situation has sparked unusual public outrage and demonstrations from worried homebuyers, suppliers, and investors.

Authorities are claimed to have instructed local governments to prepare for Evergrande’s possible collapse, and analysts claim that local governments have already taken control of several of the company’s real estate projects.

“From a macro viewpoint, it makes no difference if the decaying husk of Evergrande exists or not; what matters is who absorbs what responsibilities, or not,” Leland Miller, CEO of data analytics firm China Beige Book, told AFP.

“It’s been evident from the start that there will be a lot more pain.”

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