There is a new situation in the restructuring of China Evergrande's overseas debt.
Late at night on December 15, China Evergrande announced that every restructuring support agreement the company signed on April 3 expired on December 15 and was not extended.
In this regard, China Evergrande announced that the company and its advisers will continue to discuss with various stakeholders, hoping to reach a consensus agreement on the overall restructuring of the company's offshore debt. In view of the progress of the proposed restructuring, the company will make a separate announcement in due course.
It is worth mentioning that the Hong Kong High Court granted Evergrande's application for an extension on December 4 against Evergrande's winding-up petition, further extending the hearing of the company's winding-up petition to January 29, 2024, which gave China Evergrande a temporary breather.
The offshore debt restructuring agreement has not been extended upon expiration.
Evergrande's overseas debt restructuring plan, which had been brewing for more than half a year, came to an abrupt end.
On December 15, China Evergrande announced that the validity period of each restructuring support agreement it signed on April 3 this year had expired on December 15 and had not been extended. China Evergrande said it would make a separate announcement on the progress of the proposed restructuring in due course.
Looking back, on April 3 this year, China Evergrande disclosed the announcement of the proposed offshore debt restructuring.
As early as March 22 this year, China Evergrande (03333HK) proposed an offshore debt restructuring plan, in which Evergrande Group's overseas debt is mainly composed of three parts: one is Evergrande Group, which is the main body of bond issuance, and the total amount issued is 139US$22.5 billion of U.S. dollar senior secured notes, this group of liabilities is referred to as Group A;The other type is the overseas financial liabilities (such as loans, margin loans, repurchase agreements, etc.) of Evergrande Group, as the main debtor, and this group of liabilities is called Group C.
In addition, there is also a category of US dollar notes issued by Jingcheng***, a wholly-owned subsidiary of Evergrande, including another subsidiary, Tianji Holdings***, and its subsidiaries, with a total amount of 52$2.6 billion.
Group A and Group C creditors have two restructuring options to choose from, one is to obtain new notes issued by Evergrande Group with a maturity of 10-12 years according to the 1:1 conversion ratio;The second is to separately select Evergrande Group's 5-9 year new notes or a combination of 5 notes linked to Evergrande Property, Evergrande New Energy Vehicles or China Evergrande**, or a combination of both.
However, since these debt restructuring proposals were proposed, a number of complications have arisen, which have led to several postponements of the restructuring meeting.
In July this year, Evergrande held a hearing in the court on the above-mentioned restructuring plan, and decided to hold a creditors' meeting on August 22 and 23 to vote on the offshore debt restructuring plan. On August 28, Evergrande announced that it would extend the time of the above-mentioned creditors' meeting to September 26.
However, on September 22, Evergrande Group announced again that because the group's sales did not meet expectations, the company needed to re-examine the restructuring terms, so the restructuring meeting originally scheduled for September 25 and 26 was cancelled.
In the announcement on September 24, Evergrande Group also said that in view of the fact that Evergrande Real Estate Group, a subsidiary of the group, is being investigated by the Securities Regulatory Commission, the current situation of Evergrande Group can no longer meet the qualifications for the issuance of new notes, that is, the overseas debt restructuring plan has suffered a setback.
On September 28, Evergrande announced that Xu Jiayin, the company's executive director and chairman of the board of directors, had been taken compulsory measures in accordance with the law on suspicion of violating the law and committing crimes.
The winding-up hearing has also been postponed to January 2024.
In the race against debt restructuring, there is also a winding-up hearing petition filed by the relevant creditors.
On December 4, China Evergrande announced that the Hong Kong High Court granted the company's application for an extension on December 4, 2023, further postponing the hearing of the company's winding-up petition to January 29, 2024, which gave China Evergrande a temporary breather.
This is the seventh postponement of the winding-up hearing of China Evergrande.
Looking back, in June 2022, creditors filed a winding-up petition against Evergrande in the High Court of the Hong Kong Special Administrative Region of China, and Jiasheng Global filed a winding-up petition against Evergrande in the High Court of the Hong Kong Special Administrative Region on June 24, 2022, involving a debt amount of about 8HK$62.5 billion, when the hearing was scheduled for 31 August 2022.
Subsequently, after applying for five adjournments, the hearing was postponed again to December 4 this year, and it was once reported that "this may be the last adjournment".
It is reported that if China Evergrande is ordered to be wound up, the court will appoint liquidators to gain control from the company's directors and management, and consolidate existing assets to repay creditors' related debts.
According to the financial report data released by China Evergrande for the first half of 2023, as of June 30, China Evergrande's main revenue was about 1281800 million yuan, with a total net loss of 392500 million yuan. China Evergrande's cash and cash equivalents are approximately 404.7 billion yuan. The total assets are 1,744 billion yuan, of which current assets are 1,578.5 billion yuan and total liabilities are 2,388.2 billion yuan.
Editor-in-charge: Yang Yucheng.
Proofreader: Liu Rongzhi.
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