China Evergrande is proposing a new debt restructuring plan for offshore bondholders, which entails swapping their debts into approximately a 30% equity stake in the company’s two Hong Kong-listed subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group (NEV).
Evergrande offers bondholders equity swap
Offshore bondholders with around $19 billion of debt may face significant losses if they accept the plan. The property developer’s dollar bonds last traded at about 2.25 cents on the dollar, making bondholders evaluate the recovery potential versus alternative options, like liquidation.
This move is essential for Evergrande’s survival as it seeks to restructure and overcome its debt crisis.