Evergrande bondholders meeting approves extension of payments, easing debt crisis

Evergrande Group Photo: VCG

The indebted real estate conglomerate China Evergrande announced on Thursday the holding of the first meeting of bondholders, during which three proposals were discussed and approved, including the proposal to adjust the terms of interest payments for the bond “19 Evergrande 01 “.

Analysts said the bond payment extension will go some way to easing Evergrande’s overall debt crisis.

The “19 Evergrande 01” bond was issued on May 6, 2019, with a scale of 15 billion yuan ($2.26 billion), a coupon rate of 6.27% and a bond term of four years.

The proposal noted that the interest payment deadline for the current bond from May 6, 2021 to May 5, 2022 will be adjusted to November 6, 2022 in order to complete the payment, the company’s statement said. If Evergrande fails to make the interest payment on time, it shall pay damages daily.

The meeting also proposed requiring the company to pledge “not to evade its debts,” according to the statement.

Evergrande has told investors about its debt repayment plans after the company experienced a wave of defaults in recent months. This not only confused investors around the world, but also cast a shadow over China’s real estate market.

Nearly $20 billion of the company’s international bonds are considered in default, according to media reports.

Evergrande’s debt problem involves a wide range of upstream and downstream industry chains. The bond payment extension gives Evergrande some time to raise funds in a variety of ways, experts said.

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Elaine R. Knight