Evergrande seeks to present restructuring plan in six months; State strengthens control

China Evergrande Group said it aims to have a preliminary restructuring proposal within six months as the debt-ridden real estate company seeks to reassure creditors spooked by defaults since its finances began to unravel last year.

The long-awaited communication comes in a context in which Beijing is tightening control over the firm, while taking steps to stabilize China’s crisis-hit real estate sector.

However, some bondholders were disappointed with the 25-minute conference call – which included prepared answers to questions – saying it lacked information on plans for Evergrande.

“I had no expectations before the call or after it frankly, I think the final decision making is led by the government, the company is relatively passive,” said a foreign bondholder of the company who did not want to be identified by not be authorized to speak to the media.

Evergrande, once the largest real estate developer in China, has racked up more than $300 billion in debt and is struggling to pay off creditors, vendors and investors in wealth management products.

Last month it defaulted on some dollar bonds, prompting calls for dialogue, and nearly $20 billion of its international bonds are now considered in default.

Evergrande’s newly appointed CEO Siu Shawn, who is also chairman of Evergrande New Energy Vehicle Group Ltd, said on the call with creditors that the group is working on a comprehensive restructuring plan.

Siu said Evergrande intends to propose the plan within six months, adding that he also hopes to work with creditors on a risk management solution, said a participant on the call who declined to be named due to confidentiality restrictions.

Evergrande on Monday asked its overseas bondholders for more time to work on a debt restructuring plan, after a group of creditors said they were willing to take “all necessary actions” to defend their rights.

“The board of directors and the risk management committee look forward to further communications with investors and respectfully ask them not to take any aggressive legal action to maintain stability for the benefit of all stakeholders,” Siu said on the call.