The Evergrande Group catastrophe keeps rippling throughout the global financial system. Two months after the Chinese infrastructure giant defaulted, Deutsche Markt Screening Agentur (DMSA) announced it is preparing for bankruptcy proceedings against the company.
Evergrande Group continues its downfall after it defaulted on interest payments back in September. Yesterday, one of its international investors, DMSA, announced via press release it will prepare for bankruptcy proceedings against the group. “DMSA itself is invested in these bonds and has not received any interest payments until today’s end of the grace period. Now DMSA is preparing bankruptcy proceedings against Evergrande and calls on all board investors to join it.”
Evergrande’s default puts the global financial system at risk, said Marco Meltzer, Senior Analyst, DMSA. “In its latest stability report, the (US) fed explicitly pointed out the dangers that a collapse of Evergrande could have for the global financial system.”
Mexico has already been affected by the Evergrande crisis, with mining companies from the Mexican Stock Exchange receiving the heaviest blow. Bloomberg data from earlier this year indicated that several companies underperformed after the announcement of Evergrande’s default in September. In the Mexican Stock Exchange four companies registered major contractions to its stock prices: Grupo Mexico, Peñoles, Minera Frisco and Fresnillo as reported by MBN.
While Evergrande has been offering continuous updates on the state of the company, it warns shareholders and investors of the risks regarding any sort of deal relating its securities, considering the current unstable situation.