Creditors of China’s debt laden property giant Evergrande censure ‘botched efforts’ to get regulatory nod for fundraising

The investor group which holds more than US$6 billion worth of bonds calls the CSRC’s rejection of Evergrande’s application a ‘complete surprise’

The company scrapped six creditor meetings last month after it was unable to meet requirements from CSRC for issuing new bonds

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Published: 9:51pm, 9 Oct 2023Updated: 10:10pm, 9 Oct 2023

A group of offshore creditors of China Evergrande Group said they felt “left in the dark” and called for a resolution of regulatory issues with Chinese authorities as it slammed the debt-stricken developer’s attempts to obtain approval to issue new securities as “botched efforts”.

The investor group which holds more than US$6 billion worth of bonds issued by Evergrande and its unit, said it was difficult to believe that the country’s securities regulator, the China Securities Regulatory Commission (CSRC), would have rejected the Group’s application but for the developer’s failure to make a coordinated effort to obtain its support.

It also said it was unclear why the property giant had “suddenly conclude[d] that the NDRC requirements now present an insurmountable challenge to the implementation of the restructuring” saying there was “zero clarity” as to why such a fundraising exercise was disallowed. The National Development and Reform Commission (NDRC) is China’s top economic planning agency.

“The Ad Hoc Group implores the Group to immediately address the situation and bottom out any potential regulatory issues with CSRC and NDRC,” it said in a statement.

The move follows last month’s scrapping of six creditor meetings scheduled for September 25 and 26, after the company said it was unable to meet requirements from the CSRC for issuing new bonds – a core part of its initial restructuring proposal, after its onshore unit Hengda Real Estate Group, which is now under investigation, failed to repay a 4 billion yuan (US$547 million) bond.

An Evergrande sign is seen near residential buildings at an Evergrande residential complex in Beijing, China. Photo: Reuters

Its founder, Hui Ka-yan, who is also known as Xu Jiayin on mainland China, is under investigation by Chinese authorities due to suspected crimes and this has cast a shadow over the future of the company.