Evergrande’s $1.2bn onshore bondholders to vote on offshore restructuring plan on Wed

HONG KONG: China Evergrande Group’s onshore flagship unit Hengda Real Estate said the holders of an onshore bond worth 8.2 billion yuan ($1.19 billion) will hold a meeting on Wednesday to vote whether they will join the group’s offshore restructuring proposal.

The bond in question, due July 8 after extending the maturity by 12 months last year, could be the first onshore notes offered the same offshore restructuring terms in this round of debt crisis in the sector, fund managers said.

Onshore debts usually have a higher repayment priority than offshore counterparts and hence get better restructuring terms.

With more than $300 billion in total liabilities including offshore debt, Evergrande has been at the centre of a property debt crisis in which multiple Chinese developers defaulted over the past year, forcing many to enter debt restructuring talks.

In the filing dated Friday, Hengda said bondholders involved will vote whether they would authoritize Guotai Junan Securities to represent them to approve the offshore restructuring proposal.

In Evergrande’s offshore debt restructuring proposal announced last month, creditors can either swap all of their holdings into new notes with maturities of 10 to 12 years, or convert them into different combinations of new notes with tenors of five to nine years and equity-linked instruments.

According to the proposal, related to onshore debt, the terms only apply to the 8.2 billion yuan bond and guarantees provided to debts worth $8.09 billion.

Evergrande enters debt restructuring plan with creditors

Evergrande’s creditors will receive a fee of 0.25% of their outstanding debt if they submit their consent to the proposal by Thursday evening.

Hengda said in the Friday filing if the agenda gets rejected, bondholders can still join the restructuring plan on their own, the filing added.