Evergrande creditor group backs the Chinese developer’s efforts to keep onshore unit operational, opposes bankruptcy process
- An ad hoc group of creditors, which owns about US$2 billion offshore notes, says stakeholders are best served through the company’s continued operation
- Evergrande has to present a revised debt restructuring proposal for offshore creditors until a court hearing on Monday, failing which a winding-up order is “highly likely”
The group of creditors, which owns about US$2 billion offshore notes of Scenery Journey and guaranteed by Tianji Holding – offshore units of Evergrande – issued a statement late on Friday urging that Hengda Real Estate, Evergrande’s flagship onshore unit, be allowed to maintain business operations to ensure completion of homes and delivery of homes.
“No stakeholders of Hengda, be it customers, suppliers, creditors, or the PRC government, would benefit from forcing Hengda into a multi-year, value-destructive bankruptcy process,” said the statement issued by the group.
“Such a bankruptcy process would only detract from the common goals of ensuring the prompt completion of projects and the timely delivery of homes, as well as procuring the long-term sustainability of Hengda as a going concern,” it said.
There is also “no benefit or upside” in any bankruptcy of Hengda to the noteholders of Scenery Journey, the statement said, adding that the interests of Hengda’s stakeholders are best served through the company’s continued operation.