China Evergrande reports steep losses for 2021 and 2022, offers update on offshore debt restructuring

The Guangzhou-based company, whose Hong Kong-listed shares have been suspended from trading since March 21, 2022, posted a net loss attributable to shareholders of 476 billion yuan (US$66.3 billion) for 2021, and narrowed it down to 105.9 billion yuan in 2022, according to its exchange filings late on Monday. It had posted a net profit of 8.1 billion yuan in 2020.

The group’s total liabilities stood at 2.43 trillion yuan at the end of last year. The company’s borrowings rose to 612.39 billion yuan, from 607.38 billion yuan in 2021, according to its filings.

The company also provided an update on the proposed restructuring of its offshore debt. A hearing for the proposed scheme to be implemented by Evergrande is expected to be heard in the Hong Kong High Court on July 24 at 11.30am. Similar hearings will be held in the Eastern Caribbean Supreme Court on July 24 and in the Cayman Islands on July 25.

A successful restructuring of the company’s overdue offshore bonds is an important step for Evergrande to remain as a going concern and maintain its Hong Kong listing. Regulations require the company to release its results before it can unveil the debt restructuring proposal.

“A debt restructuring will not necessarily result in the rebirth of Evergrande,” said Ivan Li, a fund manager at Loyal Wealth Management in Shanghai. “Additional financing is needed to support its operations.”