China Evergrande to meet local bondholders, seek delay of payments that they can demand as early as Saturday

Name: Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt
Uploaded: 2022-01-05T06:35:11.000Z
Duration: 3 min 2 s
Description: Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt

Firm’s China unit Hengda to hold an online meeting with bondholders about a 4.5 billion yuan note with a January 8 put option

Trading in Evergrande bonds will be halted from Thursday ahead of the meeting

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The headquarters of China Evergrande Group in Shenzhen. Photo: Reuters

Pearl Liu

Published: 2:35pm, 5 Jan 2022

Heavily indebted developer China Evergrande Group will ask its local bondholders to delay an option where they can demand an early repayment of the firm’s yuan-denominated notes.

Hengda Real Estate, China Evergrande’s mainland Chinese unit, said it will hold an online meeting with bondholders between January 7 and 10 to vote on proposals concerning a 4.5 billion yuan (US$282 million) 6.98 per cent note due in 2023 with a January 8 put option. The put option allows bondholders to demand that China Evergrande pay back the principal this Saturday, even before the bond matures.

The company is proposing to change the option date to July 8 this year. It is also proposing to pay the interest payment due on January 8 six months later.

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Chinese real estate giants Evergrande and Kaisa continue unloading assets to cover debt

“Based on the current operation of Evergrande, we hope that the bondholders can agree with the proposed rearrangement of the redemption date and the coupon payment date, so that we can properly move forward the repayment,” the developer said in a statement to the Shenzhen Stock Exchange on Wednesday.

China Evergrande is struggling to stay afloat with 1.97 trillion yuan of liabilities, of which at least US$186.1 million in offshore bond payments are due this month. Another US$2 billion in offshore bond payments are due in March, followed by US$1.045 billion in April.

Trading in Evergrande bonds will be halted from Thursday ahead of the meeting with bondholders, the company said in a statement.