Evergrande will hold an online meeting with renminbi-denominated mortgage holders this week, as the Chinese developer with heavy debts wants to postpone more repayment periods and battle over its property projects.
Hengda Real Estate Group, Evergrande’s main subsidiary on land, will hold the meeting and subsequent series of votes from January 7 to 10 with holders of its Rmb4.5 billion ($ 707 million) in land bonds, the company said in a statement. told the Shenzhen Stock Exchange. Wednesday.
Evergrande is in the middle of a crisis in China’s major real estate sector, with a cash crisis forcing companies to settle their international debt.
The world’s most indebted developer with more than $ 300 billion in liabilities, ranging from domestic and foreign bonds to amounts owed to contractors, Evergrande is in the early stages of a large-scale and politically sensitive restructuring process.
The group has missed a series of payments on foreign bonds since September. It typically transferred the funds before 30-day grace periods expired, but failed to do so at the end of such a period in December, prompting rating agency Fitch to say it had official failure.
At its meeting this week, which involves holders of separate renminbi-denominated debt to the country expiring in January 2023, Evergrande will seek to change the date of a redemption option that will allow investors to withdraw from January 8 to July 8. te los. intends to delay a coupon payment due over the same period.
Investors and Chinese authorities have stressed the need to resume work on Evergrande’s hundreds of projects, which homebuyers often pay for before construction is completed, following a widespread halt in activity last year. On December 26, Hui Ka Yan, the group’s billionaire chairman, said in a social media post that the aim was to deliver properties to owners.
Trading in Evergrande’s shares was suspended Monday after Chinese media said the company would be forced to demolish 39 residential buildings in the southern province of Hainan. Evergrande confirmed the demolition order of local authorities in a submission to the Hong Kong Stock Exchange on Tuesday.
The group said its contracted sales in 2023 were Rmb443 billion, a 39 percent drop from last year according to Citi analysts, who also noted that its sales fell 99 percent year-on-year in December.
Evergrande also said he would “continue to maintain active communication with creditors, strive to resolve risks and protect the legal rights and interests of all parties”.
Advisers from a group of international Evergrande bondholders, which include the law firm Kirkland & Ellis and the boutique investment bank Moelis, complained in October of a lack of meaningful involvement of the company.
Separately, shares in Huarong, China’s biggest bad debt manager and the focus of creditor care earlier in 2021, lost half of their value when trading in the group resumed on Wednesday.
Trade was suspended last April when the company did not disclose its results, which led to a collapse in the prices of its foreign bonds. In August, the group announced record losses of $ 16 billion, followed by details of a $ 6.6 billion bail of state-subsidized companies including Citic. Huarong was previously the majority owner of China’s Ministry of Finance.
Its shares have fallen as much as 55 percent in Hong Kong and Huarong’s perpetual bonds, which traded as low as 54 cents on the dollar in May, are now close to their par value.