(Bloomberg) -- China Evergrande Group’s inability to meet its obligations is a market event and will be dealt with in a market-oriented way, the head of the nation’s central bank said.
“The rights and interests of creditors and shareholders will be fully respected in accordance to their legal seniority,” the People’s Bank of China Governor Yi Gang said Thursday in a pre-recorded video message to a top-level seminar about Hong Kong’s future as an international financial center.
The comments provide the latest signal that Beijing won’t bail out Evergrande as it strains under $300 billion in liabilities. The embattled property developer, which has yet to pay overdue interest on two bonds this week, has said it will “actively engage” with offshore creditors to create an overhaul plan.
Hong Kong has established an effective system and well defined legal provisions to deal with these issues, Yi said. A few firms in the short term will not undermine Hong Kong’s financial system in the long term, he said.
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