Evergrande bondholders' meeting approves payment extension, easing debt crisis
Published: May 05, 2022 09:12 PM
Evergrande Group Photo: VCG

Evergrande Group Photo: VCG

Debt-mired real estate conglomerate China Evergrande announced on Thursday that the first bondholders' meeting has been held, during which three proposals were reviewed and approved, including the proposal to adjust the interest payment arrangement for the "19 Evergrande 01" bond. 

Analysts said the bond payment extension will help to ease Evergrande's overall debt crisis to a certain extent.

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 percent, and a four-year bond term.

The proposal noted that the interest payment time of 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 complete the interest payment on time, it will have to pay damages on a daily basis.

The meeting also proposed requiring that the company promises "not to evade debts," according to the statement.

Evergrande updated investors on its debt payment plans after the company experienced a wave of defaults in recent months. This not only unnerved 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 deemed to be in default, according to media reports.

Evergrande's debt problem involves a wide range of upstream and downstream industrial chains. The bond payment extension provides a certain amount of time for Evergrande to raise funds in various ways, experts said.