Evergrande will meet with bondholders on land in an attempt to delay payments

Evergrande will hold an online meeting with renminbi-denominated bondholders this week as a heavily indebted Chinese investor seeks to postpone more repayment deadlines and battles to complete its real estate projects.

Hengda Real Estate Group, Evergrande’s main onshore subsidiary, will hold a meeting and the next series of votes from January 7 to 10 with the owners of its 4.5 billion RMB ($ 707 million) onshore bonds, the Shenzhen Stock Exchange said in a statement. day Wednesday.

Evergrande is in the center of a crisis in the huge real estate sector in China, with a financial crisis forcing companies not to pay their international debts.

The world’s most indebted developer with more than $ 300 billion in liabilities, ranging from onshore and offshore bonds to the amount owed to contractors, Evergrande is at an early stage large and politically sensitive restructuring process.

The group has missed a number of payments on offshore bonds since September. It usually transferred funds before the expiration of the 30-day grace period, but did not do so at the end of one such period in December, and the leading rating agency Fitch said that officially unfulfilled obligation.

At this week’s meeting, which will include owners of separate debt denominated on land in renminbi maturing in January 2023, Evergrande will seek to change the date of the buyout option that would allow investors to buy them from January 8 to July 8. They will also aim to defer the payment of coupons due in the same period.

Investors and Chinese authorities have stressed the need to reopen hundreds of Evergrande projects, which home buyers often pay for before construction is completed, following a widespread stalemate last year. December 26 Hui Ka Yan, chairman of a group of billionaires, said in a post on social media that the goal was to deliver real estate to owners.

Evergrande shares were traded suspended on Monday after Chinese media reported that the company would be forced to demolish 39 apartment buildings in the southern province of Hainan. In a submission to the Hong Kong Stock Exchange on Tuesday, Evergrande confirmed the order to overthrow local authorities.

The group said its contracted sales in 2023 were RMB 443 billion, down 39 per cent from last year, according to Citi analysts, who also noted that its sales fell 99 per cent in December on an annual basis.

Evergrande also said that he would “continue to actively maintain communication with creditors, strive to resolve risks and protect the legitimate rights and interests of all parties.”

Advisors to the group of international owners of Evergrande bonds, which include the law firm Kirkland & Ellis and the boutique investment bank Moelis, he complained October due to lack of significant company engagement.

Separately, shares in Huarong, China’s largest bad debt manager and the focus of creditors ’concerns earlier in 2021, lost half of its value when group trading resumed on Wednesday.

There was trading suspended last April when the company did not release its results, leading to a collapse in the prices of its offshore bonds. The group reported record losses of $ 16 billion in August and subsequently revealed details of it $ 6.6 billion in aid from state-supported companies, including Citic. Huarong was previously majority owned by the Chinese Ministry of Finance.

Its shares fell as much as 55 percent in Hong Kong, and Huarong’s permanent bonds, which traded just 54 cents a dollar in May, are now close to their face value.

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