EGRNF - China Evergrande debt plan expected soon as China starts fund worth up to $44B

China Evergrande ( OTCPK:EGRNF ) ( OTCPK:EGRNY ), one of the largest property developers in the world's second-largest economy, is expected to announce this week a plan to restructure its more than $20B of offshore debt, Reuters reported Monday.

The company, which has more than $300B debt in total, has said it would unveil the restructuring plans by the end of July. The plan will not only map out its own future, but could act as a template for its other debt-burdened peers.

Many real estate developers found themselves scrambling for cash last fall to pay interest payments on their mountains of debt as Beijing tightened financial conditions. At the same time, homebuyers have threatened to stop making monthly payments on units that have yet to be built.

Meanwhile, China will start a real estate fund of up to CNY 300B ($44B) to help property developers resolve their debt crises, Reuters reported Monday, citing a state bank official with direct knowledge of the matter.

The fund would start at CNY 80B through support from the People's Bank of China, the country's central bank, the person said. State-owned China Construction Bank would then contribute CNY 50B into the fund, but the money will come from PBOC's relending facility, Reuters said. If the model succeeds, other banks will sign on with a target to raise up to CNY 200B-CNY 300B, the official said.

On Friday, China Evergrande's ( OTCPK:EGRNF ) CEO and CFO resigned after preliminary results from a review found that they were involved in diverting money from Evergrande Property Services, a Hong Kong-listed operating subsidiary to the parent compan y.

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