China's troubled property giant Evergrande has made a key offshore interest payment a day ahead of a weekend deadline, state media said today.
The payment averts a default and buying the embattled company a reprieve as it struggles under a mountain of debt.
The crisis at one of the nation's biggest property developers has hammered investor sentiment, rattled the key property market and fuelled fears of a spillover into the wider economy.
Evergrande is reported to have missed at least $150m in offshore bond payments.
While it had a 30-day grace period on some of them, there had been a general expectation it would not be able to meet its obligations.
However, he state-backed Securities Times said today the developer had wired $83.5m for an overseas payment first due on September 23, citing "relevant channels".
It said bondholders would receive the payout before Saturday - the end of the grace period.
The news comes just a day after the company said the planned sale of its property services arm for $2.58 billion had fallen through and warned it could not guarantee it would meet its debt obligations, putting it on course for a default and possible restructuring.
Fears about an Evergrande failure have rattled markets, and shares in the firm have collapsed more than 80% since the start of the year. It rose more than 4% today in Hong Kong.
But observers warned the firm was still teetering, with several other dollar bond payments still to navigate before the end of the year.
Beijing began last year clamping down on the country's colossal property sector - estimates say it accounts for a quarter of the economy - in a bid to rein in excessive debt, with measures to restrict borrowing cutting off companies' ability to complete projects.
While Evergrande is the standout, the moves have hit several other developers, with several including Sinic and Fantasia among those failing to make debt payments.
Still, Chinese leaders insist any fallout can be contained, but the crisis has prompted rare public anger and protests from anxious homebuyers, suppliers and investors.
But Chuanyi Zhou, credit analyst at Lucror Analytics in Singapore, said the latest news would give a short-term boost to the market but Beijing was not expected to step in to prop the firm up.
"Based on recent soundings from regulators it seems the government, while keen for Evergrande to meet its obligations, is unlikely to provide any support," she said.
Authorities have reportedly asked local governments to prepare for Evergrande's potential collapse, while analysts have said authorities had already taken control of some of its real estate projects.
"From a macro perspective, whether or not the dying husk of Evergrande survives is simply not important; what's important is who assumes what liabilities, or not," Leland Miller, the CEO of data analytics company China Beige Book, told AFP.
"It's been pretty clear from the outset that much more pain is coming," Miller added.