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Evergrande proposes new debt plan where offshore creditors get 30% equity stake in subsidiaries: sources
- Offshore bondholders holding about US$19 billion of debt are likely to take a major haircut on their investments if they agree to the new terms, two sources say
- The restructuring plan could have a higher recovery rate for creditors than a liquidation scenario of less than 3 per cent, a lawyer for a group of bondholders says
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China Evergrande Group has proposed a new debt restructuring plan for offshore bondholders, offering to swap their debts into about a 30 per cent equity stake in each of the developer’s two Hong Kong-listed subsidiaries, according to two sources familiar with the matter.
The property firm’s offshore bondholders holding about US$19 billion of debt are likely to take a major haircut on their investments if they agree to the new terms, said the two sources who declined to be named because they were not authorised to speak with the media.
Evergrande did not respond to a request for comment.
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The property developer’s dollar bonds last traded at about 2.25 cents on the dollar on Tuesday, according to LSEG data, as bondholders weigh the possible recoveries in the revised restructuring plan against other options like a winding up.
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Indebted China developer giant Evergrande downplays impact of staff arrests in Shenzhen
Indebted China developer giant Evergrande downplays impact of staff arrests in Shenzhen
A lawyer representing an ad hoc group of key bondholders told a Hong Kong court on Monday the restructuring plan could have a higher recovery rate for creditors than a liquidation scenario of less than 3 per cent.
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