Evergrande aims to win approval for restructuring proposals early next year

  • Evergrande will finalize restructuring proposals by February, March
  • The Hong Kong court adjourned the settlement action until March 2023
  • Takeover of the Evergrande property by a state-supported company – registration

HONG KONG, Nov 28 (Reuters) – Embattled real estate developer China Evergrande Group (3333.HK) is aiming to get creditor approval for its debt restructuring proposals as early as the end of February, the company’s lawyers said on Monday.

Once China’s top-selling developer, Evergrande is now at the center of the country’s real estate crisis. Its $22.7 billion in offshore debt, including loans and private bonds, is in default after defaulting on payments late last year.

With few new financing options and slacking home sales, Evergrande, which has $300 billion in total debt, began one of China’s largest debt restructuring processes this year.

Evergrande expects to finalize the debt restructuring proposals by late February or early March, lawyers for the developer said in a Hong Kong court that adjourned a settlement action against the developer until March 20, 2023.

Reuters reported earlier this month that Evergrande would sign non-disclosure pacts with bondholders in November in preparation for negotiations in December, the terms of which should be finalized early next year, citing a source with knowledge of the matter.

An investor in Evergrande unit Fangchebao, an online real estate and automobile marketplace, filed for liquidation against the embattled real estate developer in June for failing to honor an agreement to buy back FCB shares the investor had bought.

Evergrande and its large offshore lending group have expressed their opposition to the winding-up motion, stating that the developer is actively pursuing the offshore debt restructuring in the interests of all creditors.

A lawyer representing the petitioner said Evergrande did not involve his client in the restructuring talks and they had no information about the process. Evergrande’s lawyer said the company plans to draft a proposal before submitting it to all creditors.

During Monday’s hearing, Judge Linda Chan said Evergrande needed to submit “something much more concrete” about its debt restructuring process before the next hearing. She instructed Evergrande to submit a progress report on the restructuring process 14 days before the next hearing.

As part of the options being considered for the restructuring proposal, Evergrande is considering using domestic assets and offering them as an additional credit enhancement to secure offshore creditor approval, sources told Reuters.

Offshore, its main Hong Kong assets were taken over by creditors.

In what could potentially cast a shadow over his plan to use onshore assets as a sweetener for bondholders, a public filing showed on Saturday that a 7.5 billion yuan (US$1.04) piece of Evergrande land was bought by a state-backed company in Shenzhen -dollar) was taken over billion).

Evergrande bought the land for 5.6 billion yuan in 2017 and planned to develop it into the group’s headquarters, Reuters previously reported.

The project has been suspended since September 2021, Chinese media outlet Caijing reported on Monday.

A spokesman for Evergrande declined to comment.

($1 = 7.2052 yuan)

Reporting by Xie Yu; Edited by Himani Sarkar and Ana Nicolaci da Costa

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