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Evergrande meets with domestic bondholders to delay payments

Evergrande will hold an online meeting with renminbi bondholders this week as the heavily indebted Chinese developer seeks to further delay repayment deadlines and battle to complete real estate projects. its real estate.

Hengda Real Estate Group, Evergrande’s main onshore subsidiary, will hold its next meeting and voting series from January 7-10 with holders of Rmb 4.5 billion ($707 million) in bonds in country, the company said in a statement to the Shenzhen stock exchange. Wednesday.

Evergrande is the center of a crisis across China’s vast real estate sector, with a cash crunch forcing companies to default on international debt.

As the world’s most indebted developer with over $300 billion in debt, ranging from domestic and foreign bonds to debts owed to contractors, Evergrande is in the early stages of a massive scale and politically sensitive. reconstruct process.

The Group has missed a series of offshore bond payments since September. It typically transferred funds before the 30-day grace period expired but failed to do so at the end of such a period on In December, top rating agency Fitch said it had Officially insolvent.

At this week’s meeting, which will be attended by holders of local yuan-denominated separate loans maturing in January 2023, Evergrande will seek to change the date of a callback option for allows investors to redeem them from January 8 to July 8. It will also aim to delay payment of coupons due from the same period.

Chinese investors and authorities have stressed the need to continue operating at Evergrande’s hundreds of projects, where homebuyers typically pay before construction is complete, following a large-scale shutdown. wide last year. On December 26, Hui Ka Yan, the billionaire chairman of the group, said in a social media post the aim is to deliver the property to the owner.

Evergrande’s stock trade is ban on Monday after Chinese media said the company would be forced to demolish 39 residential buildings in the southern province of Hainan. In a filing with the Hong Kong Stock Exchange on Tuesday, Evergrande confirmed the demolition order from the local government.

The group said contract sales in 2023 were Rmb443 billion, down 39% year-on-year according to Citi analysts, who also noted that its sales fell 99% in December. same year.

Evergrande also said it will “continue to actively maintain contact with creditors, endeavor to resolve risks and protect the legitimate rights and interests of all parties”.

Advised an international group of Evergrande bondholders, including the law firm Kirkland & Ellis and boutique investment bank Moelis, complain in October lacked meaningful engagement from the company.

Separately, share in Huarong, China’s largest bad debt manager and the focus of creditor concerns earlier in 2021, lost half its value when trading in the group resumed on Wednesday.

The transaction is ban April last year when the company did not publish results, leading to a drop in offshore bond prices. In August, the corporation disclosed a record loss of $16 billion and later revealed details of a $6.6 billion bailout from state-backed companies including Citic. Huarong was previously majority-owned by China’s Ministry of Finance.

Its shares are down as much as 55% in Hong Kong, and Huarong’s perpetual bonds, which traded as low as 54 cents against the dollar in May, are now close to their par.

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