Evergrande crisis: Chinese developer hiring more legal advisers to tackle debt
- China Evergrande Group said it proposes to hire China International Capital Corp and BOCI Asia as financial advisers, and Zhong Lun Law Firm as legal adviser
- A group of offshore bondholders warned the company that they would ‘seriously consider enforcement actions’ to protect their interests
The embattled developer, struggling with 1.97 trillion yuan (US$305 billion) of liabilities, said in an exchange filing on Friday that it was seeking to hire China International Capital Corp and BOCI Asia as financial advisers, and Zhong Lun Law Firm as legal adviser.
“In view of the operational and financial challenges the group is facing and in particular, the debt stress it is experiencing,” Evergrande said it plans to hire more professionals to “assist the company in mitigating and eliminating the risks relating to its debts and following up with demands from the creditors”.
The move comes after a group of offshore bondholders, represented by law firm Kirkland & Ellis and investment bank Moelis, said on Thursday that Evergrande had failed to substantially engage with it on restructuring efforts.
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The creditors warned the company that they would “seriously consider enforcement actions” to protect their interests and want to be consulted before any further assets are sold.
They said they had “seen no substantive engagement with offshore creditors to formulate a viable restructuring plan of [Evergrande’s] offshore indebtedness for the benefit of all stakeholders” or “with the group’s creditors in order to mitigate the group’s risk and protect the legitimate interest of the parties”.