Troubled Chinese property giant Evergrande has unveiled a long awaited debt restructuring which it said will help “efforts to resume operations and resolve issues on shore".
The firm plans to restructure US$19.1bn in offshore debt, around 84% of its total offshore leverage. The proposals allow creditors to swap debt into new notes with a maturity of 10 to 12 years.
Another option is to convert them into new notes with a five to nine-year maturity or to swap to equity-linked instruments tied to its two Hong Kong-listed units in electric vehicles and property management, according to a filing to the Hong Kong stock exchange.
“The proposed restructuring complies with international restructuring norms and best practices," the company said in the exchange filing,
Evergrande added that additional financing of up to US$44bn is required over the next three years to “ensure delivery of properties” and “resume work and production”.
Earlier this week, Evergrande said a key group of offshore bondholders had agreed to the proposal.
It plans to seek the approval of other bondholders by the end of this month, ahead of the restructuring on 1 October.
The company's overdue financial reports for 2021 and 2022 will also be released in the coming months.
Trading of its Hong Kong-listed shares will remain suspended in the meantime.
The company has come to embody a broader crisis in China’s property sector, which accounts for around a quarter of the country’s gross domestic product and has faced a crackdown from authorities since 2020 after rampant borrowing and pricing speculation.