China Evergrande challenges court deadline on debt restructuring terms: sources Reuters

© Reuters. File photo: China Evergrande Group’s Evergrande Center in Shanghai, China, September 24, 2021. REUTERS/Aly Song

Claire Jim and Shee Yu

HONG KONG (Reuters) – China Evergrande Group aims to clarify some debt restructuring terms before the next Liquidation Court hearing on March 20 to seek another postponement. Two sources familiar with the matter told Reuters.

The world’s most indebted property developer is about to reach an agreement with a major offshore bondholder on terms that would include exchanging some of its debt for equity, sources say. person said.

Evergrand, with more than $300 billion in debt, $22.7 billion of which is offshore debt, launched one of China’s largest debt restructuring processes early last year, but details are still pending with creditors. not reached.

Evergrande, once China’s best-selling developer, is at the center of a real estate debt crisis, with multiple developers defaulting on offshore debt over the past few years, forcing many to enter debt restructuring negotiations. it was done.

Evergrande plans to appear in Hong Kong court on March 20 to hear liquidation petitions filed by creditors.

At the hearing last November, the judge told Evergrande that it had made “tangible” progress in the debt review process and would provide a progress report by 14 days before the next hearing, or around March 6. I ordered

The developer told the court at the time that it aims to obtain creditor approval for the proposed debt restructuring by the end of February at the earliest.

Negotiations with bondholders are still ongoing, according to four sources. Recent discussions have focused on the price and ratio of swapping some of Evergrande’s Hong Kong listed units’ debt to equity, three sources said.

The developer’s two Hong Kong-listed units are Evergrande Property Services Group and Evergrande New Energy Vehicle Group.

Because the restructuring discussions are private, we were unable to identify the source of the information.

Evergrande declined to comment.

A debt-to-equity swap plan was proposed by Evergrande as a core part of its restructuring plan, but bondholders are seeking better terms, three sources said.

One of them said Evergrande had made “some compromises” but there was still a mismatch in expectations. The bondholders are also pressuring Evergrande chairman Hui Ka Yang to spend more of his own money to pay off his debts, the person added.

In July, the developer said it would offer offshore creditors an asset package that could include shares in two overseas-listed units, after which it was said it was considering onshore assets as a sweetener for its restructuring plans. .

The developer first met face-to-face with Hong Kong offshore bondholders in January after beginning formal negotiations on restructuring terms at a virtual meeting in December, sources told Reuters.

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