SINGAPORE (Reuters) – China Evergrande slipped toward a kind of limbo on Friday as time ticked away on an interest payment deadline which global markets are watching for signs of default, leaving investors on tenterhooks over the embattled property giant’s fate.

China Evergrande is short of funds to pay its debts totalling $305 billion. Markets worry that collapses could have reverberating effects around the world.

Evergrande hired financial advisors last week and warned about default. However, world markets have stabilized since then. Furious investors protested at its offices to retrieve their life savings that had been deposited into the wealth management products and properties of Evergrande.

Evergrande promised that they would prioritise these investors and even resolved one coupon on a domestic bond. However, it did not mention the $83.5million offshore interest payment on Thursday and the $47.5million payment due next Monday.

It is now looking like it could be another month before bondholders see the light.

New York City was asleep when the announcement about the payment came out. The company spokesperson didn’t respond to inquiries for comment.

In default of payment within thirty days would result in the bonds being placed on hold. It also raises concern over a chaotic liquidation that could cause havoc to China’s huge property market.

Jennifer James, Janus Henderson Investors’ portfolio manager and chief emerging markets analyst said that current market prices indicate investors in Evergrande’s dollars bonds will not recover much.

According to her, “The most likely outcome is for the company to reach an agreement with its creditors regarding a restructuring plan.”

China’s treatment of Evergrande (and other) could prove to be a major factor. A mismanaged situation could lead to loss of trust and contagion effects on other financial markets.

According to a Hong Kong trader, bondholders must know if overnight payments were received within the hour after 0100 GMT.

Bloomberg Law, which cited unnamed persons familiar with the situation, reported Thursday that Evergrande was being asked by Chinese regulators not to default.

According to the Wall Street Journal, however, unnamed officials claimed that Evergrande was being threatened by authorities.

After a steep selloff, global markets began to recover and trade on the assumption that Evergrande’s problems can be controlled. [MKTS/GLOB]

Evergrande’s assets trade at distress levels. The shareprice is down over 80% and dollar bonds due to be paid in the near future are around $30 cents per dollar.