China Evergrande: Foreign currency-denominated debt restructuring plan: To discuss with creditors
-Received $ 260 Million Guarantee Performance Claim Notice-
China Evergrande:
On December 3, it announced that it had received a $ 260 million (30 billion yen) guarantee performance claim notice from creditors.
If Evergrande cannot fulfill its guarantee
“There is a possibility that creditors may request that the repayment be advanced.”
Guaranteed by US dollar-denominated private placement bonds:
According to Chinese media
The target is private placement bonds denominated in US dollars.
If we cannot respond to the request from the creditor,
May be considered a substantive default.
Requests from overseas creditors:
Extension of repayment deadline for foreign currency-denominated debt,
Reduction of repayment amount, etc.
May be asked.
However, overseas creditors are likely to demand the same repayment conditions as domestic creditors.
The talks are expected to be difficult.
Bankruptcy case in China:
In China, “HNA Group, which had a large amount of foreign currency-denominated debt,” fell into financial difficulty.
The Hainan Provincial Government has proceeded with debt restructuring under the “Corporate Bankruptcy Law Procedures involved in Management”.
Nihon Keizai Shimbun
https://www.nikkei.com/article/DGXZQOGM03CRI0T01C21A2000000/
Evergrande seeks restructuring plan with creditors
China’s struggling Evergrande Group says
it will negotiate a workable restructuring plan with offshore creditors after revealing it may not have enough funds to fully meet its debt obligations.
The real estate developer
said on Friday that it had received a demand from creditors to pay about 260 million dollars.
Evergrande said in a statement
there is “no guarantee that the group will have sufficient funds to continue to perform its financial obligations.”
It said it plans to “engage with offshore creditors to formulate a viable restructuring plan.”
The announcement
prompted a swift response from Guangdong Province, where the company is based.The provincial government
summoned Evergrande Chairman Hui Ka Yan for an explanation.It said it will send a working group to the company to oversee risk management, tighten controls, and get operations back to normal.
Chinese financial authorities
are trying to stop the impact of Evergrande’s financial woes from spreading to the broader property sector.
The central bank,
the People’s Bank of China,said in a statement that Evergrande’s problem was mainly caused by its own mismanagement and reckless expansion, and that risks to the general financial market can be contained.
NHK WORLD-JAPAN News