EGRNF - China Evergrande's restructuring plan fails to impress investors- report

2023-03-23 09:07:35 ET

China Evergrande Group's ( OTC:EGRNF ) ( OTC:EGRNY ) recently unveiled restructuring proposal for $22.7B of offshore debt has failed to satisfy investors due to its lengthy repayment period and inadequate sweeteners, Reuters reported Thursday, citing creditors and analysts.

The Chinese property developer, which has been struggling with over $300B in liabilities, said Wednesday that creditors can either exchange their notes at one-to-one conversion ratio for new notes with a tenor of 10 to 12 years, or elect new notes with a tenor of five to nine years and a package of equity-linked instruments.

"Overall we are not very satisfied with it, since there is no more credit enhancement and the new tenors are too long," Sunny Jiang, head of fixed income investment at Haitong International Asset Management, told Reuters in reference to Evergrande's ( OTC:EGRNF ) dollar debt revamp plan.

Should the plan get passed, we worry it might set a bad example for other developers mulling their restructuring proposals, and it might be even more challenging for bondholders to recoup their investment," he added.

At the start of this week, Evergrande ( OTC:EGRNF ), which defaulted on some of its offshore debt in late 2021, said it had executed the term sheets for restructuring its offshore debt and had received support from a number of major holders of its offshore notes.

Late last year, the builder was said to have planned to meet with its dollar bondholders to unveil its restructuring plan .

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