- The company said in January that the proposal would come within 6 months
- The 2021 audit results are not in time for the March 31 deadline
- Planned transaction with CITIC Trust, Guangzhou can offer model
Hong Kong / Beijing, March 22 -Embattled China Evergrande Group (3333.HK) has delayed the release of its annual results due to concerns about its financial position.
Evergrande, whose $ 22.7 billion worth of offshore debt is considered the default, is trying to “further strengthen communication” with creditors to reach its end-July target, Managing Director Siu Shawn calls investors Said in.
Evergrande said earlier on Tuesday that the submission to the stock exchange had not completed the audit work and would not be in time for the March 31 deadline for submitting the 2021 financial results.read more
Sign up now for unlimited free access to Reuters.com
register
Evergrande, the world’s most debt-rich real estate developer, told investors in January that it aims to implement a preliminary restructuring proposal to investors within six months.read more
The wave of defaults in China’s real estate sector has upset investors, and while state intervention has calmed market concerns about the chaotic collapse of Evergrande, investors are still dark about whether they will regain their money. It is in.
Once the best-selling developer in China and now with more than $ 300 billion in debt, Evergrande failed to pay some foreign bonds in December, paying back to suppliers and creditors, projects and housing. I had a hard time completing.
As the Guangdong provincial government leads the restructuring, the developers set up a risk management committee in December consisting of members of state-owned enterprises.
“We are working to announce a preliminary restructuring proposal by the end of July, with widespread support and understanding from the majority of creditors,” Chen Young, a member of the committee, told investors. Stated.
As part of a plan to sell assets to repay part of its offshore debt, developers are working on the sale of Hong Kong’s Yuen Long land lot and Evergrande Group commercial building, Liang, a director of Evergrande Group. Mr. Chibayashi said.
Trading of shares in Evergrande, its real estate services division Evergrande Property Services Group Ltd (6666.HK), and electric vehicle division China Evergrande New Energy Vehicle Group Ltd (0708.HK) has been suspended since Monday.
In a call from investors, Liang said developers are trying to attract strategic investors and restore value in both the electric vehicle and real estate services sectors.
According to Shiu, the EV unit was aimed to begin mass production in June of the first electric vehicle, the Hengchi 5 Sport Utility Vehicle, after being approved for sale last week.
Some of the investors who participated in the call were not impressed with the guarantee from management.
The aerial photograph shows 39 buildings developed by the Evergrande Group of China on January 7, 2022, on the artificial Ocean Flower Island in Danzhou City, Hainan Province, China, where authorities ordered the dismantling. Taken with a drone.Reuters / Allie Song
read more
“They mainly explained why stock trading was suspended. There was no new information and the situation remained the same,” said the bondholder who answered the phone because he was not allowed to talk to the media. I said I couldn’t list it.
Model to follow?
Earlier on Tuesday, two sources familiar with the matter were Evergrande’s plans to return the land used as collateral for a trust loan to the Guangzhou government, a region that could be duplicated by another debt-bearing Chinese real estate company. He told Reuters that it would provide a model for municipal involvement.
The transaction was issued to Evergrande by CITIC Trust using funds raised from investors, according to a document outlining some of the plans by sources and Reuters ($ 517.3 million). Focusing on trust loans.
Under the plan, CITIC will return the land used as collateral to Evergrande, which will be transferred to the Guangzhou Municipal Government for sale.
The state-owned Guangzhou City Construction Investment Group will act as a guarantor for the loan, and CITIC will use funds from the Guangzhou City Government to repay the principal to investors within two years.
The plan is still awaiting approval from investors in trust loans, one said.
According to analysts, this model of local governments and creditors working together to solve Evergrande’s debt repayment problem can be replicated to other trust loans, with state-owned city investment companies involved in the company’s debt restructuring process. There is likely to be.
Evergrande, CITIC and Guangzhou City Construction Investment did not respond to requests for comment.
A trust company that pools funds from wealthy investors is an important source of funding for Evergrande and other real estate developers in China.
In another submission on Tuesday, Evergrande began investigating how the real estate services group seized 13.4 billion yuan in deposits promised as collateral for third-party guarantees. Stated.
The foreclosure of funds discovered while the real estate services sector was preparing its annual report underscores Evergrande’s turmoil, stating that it would hire King & Wood Maresons as additional legal counsel.
($ 1 = 6.3634 RMB)
Sign up now for unlimited free access to Reuters.com
register
Report by Shuyan Wang and Jing Xu in Beijing, Clare Jim in Hong Kong, Jason Xue in Shanghai Written by Sumeet Chatterjee Edited by Christian Schmollinger and Mark Potter
Our Criteria: Trust Principles.