Evergrande wants authorization for debt restructuring in early 2023

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Real estate developer China Evergrande aims to get creditors’ approval of its debt restructuring proposals by the end of February, the company’s lawyers said on Monday.

Evergrande, once China’s top-selling developer, is now at the center of the country’s real estate crisis. The company’s $22.7 billion offshore debt, including loans and corporate bonds, is considered in default after missed payments late last year.

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With few new financing options and slowing home sales, Evergrande, which has $300 billion in total liabilities, has embarked on one of China’s biggest debt restructurings of 2022.

The group hopes to agree on debt restructuring proposals by the end of February or early March, lawyers for the developer told a Hong Kong court, which postponed liquidation proceedings against the developer to March 20, 2023.

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Reuters reported earlier this month that Evergrande would sign nondisclosure agreements with bondholders in November to prepare for December talks, with terms to be finalized early next year, citing a source with knowledge of the matter.

An investor in Fangchebao (FCB), Evergrande’s real estate and auto marketplace, filed a liquidation petition against the developer in June, arguing the group did not honor an agreement to buy back the investor’s shares in FCB.

Evergrande and its group of offshore creditors voiced opposition to the petition, saying the company was actively moving forward with offshore debt restructuring work on behalf of all creditors.

During Monday’s hearing, Judge Linda Chan said Evergrande will need to convey “something much more concrete” about its debt restructuring process until the next hearing. She instructed the developer to file a process update report 14 days before the next hearing.

As part of options being considered for the restructuring proposal, Evergrande is considering offering assets in China as an additional asset to secure the approval of offshore creditors, sources told Reuters.

In what could cast a shadow on that plan, a public document showed on Saturday that land owned by Evergrande had been acquired by a state-owned company in Shenzhen for 7.5 billion yuan ($1.04 billion).

An Evergrande spokesman declined to comment.

Source: CNN Brasil

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