Evergrande seeks patience from global investors on repayment

Evergrande was deemed to be in default in December after missing dollar bond payments. PHOTO: REUTERS

BEIJING (BLOOMBERG) - China Evergrande Group has urged offshore bond holders not to adopt aggressive legal action over repayments, after a group of its overseas creditors threatened to take enforcement measures.

The developer is seeking more time from overseas investors to fully consider uncertainties and risks in order to make a debt risk disposal plan that will protect the interests of various parties, the company said in a statement on Tuesday (Jan 25). Evergrande is drafting a detailed and effective debt restructuring plan and actively maintaining dialogue with offshore creditors, it added.

Evergrande, saddled with US$305 billion (S$410 billion) of liabilities as at mid-2021, was deemed to be in default in December after missing dollar bond payments.

An ad hoc group of Evergrande's offshore bond holders said last week that the Chinese developer failed to substantively engage with it about restructuring efforts, and will "seriously consider enforcement actions" to protect investor's interests.

The company's offshore investors seek to be consulted before any further assets are sold, with the group saying that Evergrande's "lack of engagement and opaque decision-making to date is contrary to well-established international standards in restructuring processes of this magnitude".

Evergrande's bonds, while still showing deep levels of distress, have since rallied on signs of progress in its restructuring, which is being led by the Chinese government. Last week, Bloomberg reported that the developer has started to identify bond holders, and Evergrande said it will hire more financial advisers. The Guangdong government plans to release a debt restructuring framework by March, financial information provider REDD reported.

The developer's note due in 2022 is indicated at about 16.6 cents on the dollar on Tuesday morning, Bloomberg-compiled prices show.

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