EGRNF - China Evergrande update: Auditor resigns payment plans proposed to creditors

PricewaterhouseCoopers (PwC) has resigned as China Evergrande's ( OTC:EGRNF ) ( OTC:EGRNY ) auditor as of Jan. 16, 2023, due to disagreements over a number of issues, including the scope and timeframe for PwC's assessment of Evergrande's subsidiaries as a going concern, the property developer said in a statement.

They also disagreed on additional audit work and procedures needed for its asset impairment assessment, the company said. "As such, the board is of the view that it is in the best interests of the company and its stakeholders to appoint another auditor to complete the audit work as soon as practicable," Evergrande ( OTC:EGRNF ) said.

In its resignation, PwC said it hadn't received information related to certain significant matters in the audit of the Evergrande's consolidated financial statements for FY2021.

Some of the information it hadn't received included an investigation report and information related to setting up an independent investigation committee of the audit committee of the company and by the audit committee of China Evergrande New Energy Vehicle Group ( OTC:EVGRF ).

It also hadn't received information regarding the deduction of RMB 13.4B deposit pledge guarantee by the relevant bank as disclosed by Evergrande Property Services.

With PwC resigning, Evergrade ( OTC:EGRNF ) will appoint Prism Hong Kong and Shanghai Limited as its new auditor.

The Chinese property developer has been grappling with ~1.97T  yuan (US$290B) of liabilities and still hasn't presented creditors with a restructuring plan that it had promised by the end of July.

Bloomberg reported Monday that the company has been discussing a proposal with creditors that includes two options for extending its payment deadlines on unsecured offshore debt. One option would repay debt in installment payments on principal with total repayment stretching out as long as 12 years, the news organization said, citing people familiar with the matter.

The other other involves creditors swapping part of their debt into shares of the Hong Kong-listed company and its auto and property management units through the issue of new hybrid securities, such as convertible bonds, the people said.

Earlier this month, Evergrande Group ( OTC:EGRNF ) Chairman Hui Ka Yan promised to repay debt .

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