Chinese real estate giant Evergrande asked for six to present a “restructuring proposal” to its creditors and its shares fell

FILE PHOTO: A partially removed China Evergrande Group company logo is seen on the facade of its headquarters in Shenzhen, Guangdong province, China January 10, 2022. REUTERS/David Kirton

The indebted Chinese real estate giant Evergrande said it aims to be able to present a “preliminary restructuring proposal” to its creditors over the next six months.

Evergrande held a telephone conference last night with its creditors, after which it sent a statement to the Hong Kong Stock Exchange, where it is listed, in which it explains that “it reiterated its position that it will evaluate the conditions of the group, with a view to formulating a plan of restructuring that protects the rights of all parties involved”.

The document only adds the aforementioned term and indicates that “audit work” is being carried out, while promising creditors that “it will continue to listen carefully to their opinions and suggestions.”

Investors did not seem too optimistic about the latest news, as evidenced by the fact that Evergrande’s shares in Hong Kong fell more than 6.2% on Thursday shortly before 12:00 local time (04:00 GMT).

Panel with the evolution of the Hong Kong Stock Exchange, in a file photograph. EFE/EPA/JEROME FAVRE

This same week, the conglomerate had already published a statement in which it asked its creditors for patience, which it also urged not to “take aggressive legal action” while it continued to analyze the real state of the corporate accounts and prepare a “reorganization” plan. ”.

That was the company’s response to information published in the international press, which pointed out that Evergrande’s ‘offshore’ bondholders would be preparing to claim through the courts that the Chinese firm fulfill its obligations.

It has also recently emerged that the authorities of the southeastern province of Canton – which intervened in Evergrande in early December 2021 – would announce a framework for the debt restructuring plan before March, and that they would have all the details ready by October.

FILE PHOTO: The logo of China Evergrande group is seen at its headquarters in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song

In total, Evergrande has issued around 20,000 million dollars in offshore bonds, and leading rating agencies such as Fitch they already consider that part of them has defaulted.

According to data offered in the middle of last year by the company, its total liabilities exceed 300,000 million dollars, although the situation became especially difficult to sustain after, in August 2020, Beijing announced restrictions on access to bank financing for companies. promoters that, like Evergrande, had accumulated a high level of debt, supporting their growth for years with aggressive leverage policies.

(With information from EFE)

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