(Bloomberg): China Evergrande Group, a developer at the center of China’s property crisis, is in talks with creditors for a restructuring plan that includes two options for extending the maturity of unsecured offshore debt, it says. said a person familiar with the matter.
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One option involves paying principal in installments over a debt with a repayment term of as much as 12 years, said the people, who asked not to be identified because the information is private. The extension will be done by issuing new notes to replace the old ones, and the coupon on the new bonds will be set in the range of about 2% at the lower end, the people said.
Another option would be to ask creditors to exchange part of their debt for shares in Hong Kong-listed companies and their auto and property management divisions through the issuance of new hybrid securities, such as convertible bonds, the people said. . The installment plan also extends the maturity, but for a shorter period, with a coupon set at around 6% to 7%. The terms of the proposal are subject to change as the company seeks feedback from key creditors.
Still, the proposal is the most detailed glimpse yet of Evergrande’s restructuring plan, one of the largest in Chinese history affecting banks, trust companies and millions of homeowners. will be one. The clocks are ticking for the world’s most indebted developer, whose dollar-denominated bond first defaulted over a year ago and holds about $16.6 billion in outstanding dollar bills. The company faces a hearing on March 20 in a Hong Kong court over a liquidation petition that could lead to the liquidation of its assets.
A media representative for Evergrande declined to comment when contacted by Bloomberg News.
The builder held its first face-to-face meeting with members of an ad hoc group of bondholders in Hong Kong last week.
This came after Evergrande recently missed another self-imposed deadline to publicly submit preliminary restructuring blueprints by the end of 2022. The company expects to receive backing from offshore creditors by the end of February or early March, the company’s legal representative said during the winding up. – Hearing in the end of November.
A group of creditors presented Evergrand management with a “counteroffer” last week that included material amendments intended to pamper Evergrand’s offer, according to people familiar with the matter.
Creditors have also previously demanded chairman Hui Ka Yan to inject at least $2 billion of his personal fortune into the builder.
–With help from Alice Huang, Emma Dong, and Erin Hudson.
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