Caixin
May 07, 2022 04:12 AM
BUSINESS

Evergrande Dodges Onshore Default With Six-Month Debt Extension

What’s new: China Evergrande Group’s onshore unit won bondholder approval to extend payments by six months on two yuan notes originally due Friday, according to filings with the Shanghai Stock Exchange.

Evergrande, weighed down by more than $300 billion of liabilities and in the midst of a debt restructuring, faces a peak of debt payments or buybacks this month that started in April. The extension aims to avoid an onshore debt default.

Currently Evergrande has 13 outstanding bond issues with a total balance of 55.85 billion yuan ($8.38 billion), according to DealingMatrix. The company didn’t disclose the balance of the two notes that were extended.

The background: Evergrande has said it will unveil a debt restructuring proposal for its creditors by the end of July, fulfilling a promise it made to investors in January. But in two teleconferences with creditors in January and March, the company didn’t clarify whether the debt restructuring will include both onshore and offshore debts.

So far Evergrande has not officially defaulted on its onshore debt, though it did default on a dollar bond. The real estate developer said in a Dec. 3 filing with the Hong Kong stock exchange that it received a demand from creditors to repay a $260 million debt guarantee obligation. The company didn’t fulfill the obligation, triggering cross-defaults on its $19.2 billion in outstanding dollar bonds.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

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