Evergrande misses overhaul proposal deadline amid creditor talks

CHINA Evergrande Group delayed releasing a much-anticipated restructuring plan again, missing a self-imposed deadline and disappointing creditors seeking to salvage investments. 

The world’s most indebted developer has yet to announce its offshore debt-restructuring plans, falling short on its promise to do so by the end of 2022. Evergrande did not immediately respond to a request seeking comment during non-business hours. 

With about 1.97 trillion yuan (S$380 billion) of liabilities, the company is facing a winding-up lawsuit in Hong Kong, while sitting at the heart of a property crisis that has triggered a flurry of defaults and caused home construction halts across the country. 

Evergrande’s fate has broader implications for China’s US$58 trillion financial system, and could send ripples across banks, trusts and millions of home owners. It would likely be among the country’s biggest restructuring efforts. The sheer size has left investors worried that any collapse may spark financial contagion and curb growth in the world’s second-largest economy, which depends on the housing market for about a quarter of gross domestic product.

The company previously failed to come up with a “preliminary restructuring plan” that it promised by the end of last July. It met with an ad hoc group of its US dollar bondholders in early December to formally discuss a proposal, Bloomberg reported earlier. 

It expected to receive support from offshore creditors by the end of February or early March, the developer’s legal representative said during a winding-up hearing late last November. Evergrande was urged by the judge of winding-up case to present “something more concrete” during the next hearing on Mar 20. BLOOMBERG