Evergrande extends debt plan voting deadline to May 18 after support falls short

Toronto – China Evergrande Group extended a deadline for investors to vote on its restructuring plan after the embattled developer failed to win enough support for the massive overhaul.

It said on Thursday that investors holding 77 per cent of its Class A offshore bonds backed the plan, while just 30 per cent of Class C holders endorsed it.

Evergrande needs to secure support from 75 per cent of creditors by value to

implement the debt restructuring, one of China’s biggest ever.

Creditors of the world’s most indebted developer had until 5pm on Thursday in Hong Kong to agree to the restructuring plan in order to get a 0.25 per cent consent fee. Evergrande has extended the consent deadline to May 18.

A successful debt restructuring is key to its fight against an investor’s court effort to potentially liquidate the firm, with the next hearing scheduled for July. Getting the case withdrawn or dismissed is among the things needed for shares of Evergrande and two listed units to resume trading.

The company disclosed earlier this month that holders of more than 20 per cent and 35 per cent of outstanding dollar bonds respectively issued by Evergrande and unit Scenery Journey (SJ) backed the debt offers. Those investors included Redwood Capital Management and Saba Capital Management, according to people with knowledge of the matter.

Evergrande said more than 91 per cent of SJ noteholders support the plan, along with 64 per cent of Tianji noteholders.

Evergrande released its long-awaited debt proposal in March, 15 months after first missing payments on public dollar notes. Potential hurdles to the plan quickly emerged, with a law firm inviting creditors to organise and potentially seek more time to consider the offer.

Meanwhile, some investors and analysts expressed doubts about proposed recoveries, and the company’s dollar-bond prices fell amid broader market weakness. BLOOMBERG