China Evergrande Group is planning its first in-person meeting with members of a major offshore bondholder group next Wednesday, as pressure heaps on the world’s most-indebted developer to release a restructuring framework.
(Bloomberg) — China Evergrande Group is planning its first in-person meeting with members of a major offshore bondholder group next Wednesday, as pressure heaps on the world’s most-indebted developer to release a restructuring framework.
The company, which is at the epicenter of China’s property crisis, is slated to meet in Hong Kong with members from an ad-hoc group of dollar-bond holders, the first of its kind since Evergrande became a defaulter more than a year ago, according to people familiar with the matter, who requested anonymity discussing private matters.
A media representative for Evergrande didn’t immediately offer comment when reached by Bloomberg News. Advisers to the ad-hoc group, Moelis & Co. and Kirkland & Ellis LLP, didn’t immediately respond to an email seeking comment.
Progress on Evergrande’s effort to reach a debt solution with creditors is under close scrutiny, now that the defaulter has missed another self-imposed deadline to publicly deliver a preliminary restructuring blueprint by the end of last year. The company’s debt overhaul would be one of China’s biggest ever and carry broader implications for the country’s $58 trillion financial system.
The ad-hoc bondholder group is expected to present a “counter-offer” to a restructuring proposal that was presented by Evergrande and discussed at an online meeting last month, said the people. The counter-offer will involve creditors’ key revisions aimed at sweetening Evergrande’s proposal, according to one of the people.
Evergrande previously told the bondholders that its restructuring proposal may include swapping debt for shares in its Hong Kong-listed auto and property management units. The group of creditors has also asked Chairman Hui Ka Yan to inject at least $2 billion of his personal wealth into Evergrande as a condition for agreeing with any proposal from the company.
Evergrande said in a stock exchange filing last month that differences between itself and creditors on the framework and key provision of its restructuring are “narrowing” but there remains “significant uncertainty” over whether the resources for repayment can generate expected value.
–With assistance from Emma Dong.
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