Evergrande is due to announce a debt restructuring plan this week


by Clare Jim

HONG KONG (Reuters) – Real estate group China Evergrande is due to announce a debt restructuring plan this week that will determine its future and how Beijing plans to weather the crisis in the property sector.

With more than $300 billion in debt, Evergrande has been at the center of China’s property slump for the past year. The company is struggling to repay suppliers and creditors as well as investors in wealth management products, after Beijing launched measures to control developers’ debt levels.

Evergrande, in default on its $22.7 billion in offshore debt, announced in March that it would unveil a preliminary restructuring plan by the end of July.

This offshore debt restructuring plan should serve as a model for its cash-strapped counterparts.

The restructuring proposal comes at a time when China’s macroeconomic conditions have deteriorated and the property sector is facing unprecedented challenges.

The world’s second-largest economy, of which the real estate sector accounts for a quarter, narrowly avoided a contraction in the second quarter, however.

Some of Evergrande’s foreign creditors told Reuters there were still disagreements over how to repay and reorganize the debt, which could lead to a delay in implementing the restructuring.

Evergrande chief executive Siu Shawn, however, told the 21st Century Business Herald that the company had reached basic consensus with foreign creditors on the principles and framework of the proposed restructuring.

In May, Reuters reported, the group was considering repaying about $19 billion (17.7 billion euros) in debt to foreign creditors through cash installments and shares in two of its listed subsidiaries. .

In mainland China, Evergrande has extended its debt repayment obligations.

The developer’s latest proposal to extend repayment of a 4.5 billion yuan ($666.7 million) bond was rejected this month.

Evergrande also aims to publish a simple restructuring plan for its onshore debt this week, financial information provider REDD reported on Friday.

(Reporting Clare Jim; French version Charlotte Lavin, editing by Kate Entringer)



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