By Xie Yu
HONGKONGNov. 28 – Beleaguered Chinese property developer Evergrande Group aims to win creditor approval for its debt restructuring proposals as early as late February, the company’s lawyers said on Monday.
Evergrande, once China’s top-selling real estate developer, is now at the heart of the country’s real estate crisis. Its $22.7 billion in external debt, including private loans and bonds, is considered to be in default after failing to make payments late last year.
With few financing options and slowing real estate sales, Evergrande, which has total liabilities of $300 billion, embarked on one of China’s largest debt restructuring processes this year.
Evergrande plans to finalize the debt restructuring proposals by late February or early March, the developer’s lawyers told a Hong Kong court, which adjourned a settlement lawsuit against the developer until March 20, 2023. .
Reuters reported earlier this month that Evergrande would sign nondisclosure agreements with bondholders in November to prepare for negotiations in December and that terms would be finalized early next year, citing a source familiar with the matter.
An investor in Evergrande’s unit Fangchebao, an online real estate and automobile marketplace, filed the liquidation petition against the conflicting property developer in June because it failed to honor an agreement to repurchase the investor’s purchased shares FCB extension.
Evergrande and its major overseas lending group expressed opposition to the winding-up petition, saying the developer was actively pursuing external debt restructuring work in the best interests of all creditors.
A lawyer representing the petitioner has stated that Evergrande did not involve his client in the restructuring discussions and that he has no information on the process. Evergrande’s attorney said the company plans to draft a proposal before sharing it with all creditors.
During Monday’s hearing, Judge Linda Chan said Evergrande would need to provide “something much more concrete” about its debt rollover process for the upcoming hearing. The judge ordered Evergrande to file a report on the restructuring process 14 days before the next hearing.
As part of the options being considered for the restructuring proposal, Evergrande is studying the possibility of using domestic assets and offering them as additional credit enhancement to get approval from overseas creditors, sources told Reuters.
Overseas, its major assets in Hong Kong have been taken over by creditors.
In what may cast a shadow over his plan to use domestic assets as a form of “gratuity” for bondholders, a public filing on Saturday showed that a parcel of land owned by Evergrande had been purchased by a state-owned company in Shenzhen for 7.5 billion yuan ($1.04 billion).
Evergrande bought the land for 5.6 billion yuan in 2017 and plans to make it the group’s headquarters, Reuters reported.
The project has been on hold since September 2021, Chinese outlet Caijing reported on Monday.
An Evergrande spokesperson declined to comment.
(1 US dollar = 7.2052 yuan)
