China Evergrande to give creditors glimpse of restructuring plan

Bloomberg

The developer at the epicenter of China’s property debt crisis appears to be inching closer to unveiling a restructuring blueprint, after a long delay that has frustrated investors and highlights their struggle in a country still relatively new to defaults.
China Evergrande Group planned to meet with an ad-hoc group of its dollar bondholders to formally discuss a debt restructuring proposal, people familiar with the matter said. The meeting could mark a significant step towards more details of a keenly-awaited restructuring plan, after the builder roiled markets late last year by defaulting on dollar bonds.
Other people familiar with the matter said late last week that offshore creditors were signing confidentiality agreements to advance debt negotiations.
Evergrande is the world’s most indebted developer, and its restructuring would be one of China’s biggest ever, with implications for banks, trust firms and millions of home owners.
The builder has become emblematic of a broader crisis in the property sector, where strains spread after a government crackdown from 2020 on excessive borrowing and real estate speculation.
Contagion from that shock dragged Chinese offshore junk notes, most of which come from property firms, deep into distress earlier this year. Those securities just had one of their biggest rallies ever in recent weeks, after China ramped up efforts to rescue the sector and relaxed some Covid controls. Average prices have climbed to about 68 cents on the dollar, near the highest since April.
But as Evergrande’s case illustrates, creditors face a long and uncertain road to recovering funds. The developer’s dollar notes still trade below 10 cents.
The planned meeting between Evergrande and the ad-hoc group is still subject to change, the people familiar said, asking not to be identified discussing private matters.