Evergrande put forward the schedule of debt restructuring plan.
strive to put forward a preliminary restructuring plan in the next six months
On January 26, China Evergrande (3333. HK) announced that the company held a teleconference with group creditors on the same day. The company reiterates that it will assess the situation of the group and formulate adequate plans to ensure the rights of stakeholders.
To this end, the company is promoting the auditors to carry out relevant work, and will continue to carefully listen to the opinions and suggestions of creditors during the period, and strive to put forward a preliminary restructuring plan in the next six months.
Once “begged” overseas creditors to give more time
Evergrande is facing debt pressure from various parties, including US dollar debt. On January 24, Evergrande issued a sincere statement, saying that the group was in continuous communication and dialogue with overseas creditors with a positive attitude together with relevant consulting institutions, saying that “we urge overseas creditors to give us more time and support us to fully consider all kinds of uncertainties and risks”, and called on overseas creditors to “not take any radical legal action”.
According to market data, Evergrande’s overseas liabilities exceed 150 billion yuan (US $23.64 billion), mainly including US $21.85 billion of existing public bonds, and the rest are private bonds and syndicated loans. By the end of 2020, the total liabilities of Evergrande group were 1.95 trillion yuan, of which the total interest bearing liabilities exceeded 700 billion yuan.
At present, the main organization of Evergrande group to deal with the debt crisis is the risk resolution Committee established at the end of last year, which is composed of seven members from different backgrounds such as local state-owned enterprises, asset management companies, securities companies and law firms. Xu Jiayin, chairman of the board of directors of China Evergrande, serves as the chairman of the Committee.
Evergrande once said in the announcement that although the risk resolution committee does not belong to the Committee under the board of directors, the risk resolution committee will actively play an important role in the future risk resolution of the group.
Evergrande’s board of directors also changed its members not long ago, and the direction of debt securitization is clear. According to the announcement, Sean, chairman of Evergrande motor, was appointed as an executive director, and Liang Linlin, chairman of Cinda Hong Kong, was appointed as a non-executive director. Cinda Hong Kong is a subsidiary of Cinda China, one of the four major asset management companies in China. Cinda China is good at resolving the risk of non-performing assets of financial institutions and entity enterprises. It has participated in the restructuring of Founder group, Shanghai Shanghai Zhongyida Co.Ltd(600610) , Gangtai group and other companies.
in addition, Evergrande has successively hired a number of intermediaries to participate in debt risk resolution. last September, Evergrande hired Hualian China and Zhonggang capital as joint financial consultants to evaluate the current capital structure of the company and study the liquidity situation. On January 21, Evergrande announced that it proposed to hire more intermediaries, including China International Capital Corporation Limited(601995) , BOC International Asia Co., Ltd. as financial advisers and Zhonglun law firm limited liability partnership as legal advisers.
In addition to formulating the reorganization plan at the asset level, in terms of sales, “guaranteed delivery” is also an important task for Evergrande at present. However, debt ridden Evergrande did not achieve its sales target. According to Kerui research data, Evergrande’s annual sales in 2021 was 440 billion yuan, ranking fifth among Chinese real estate enterprises, down nearly 40% from 732.3 billion yuan in 2020.
