(Beijing) The Chinese real estate giant Evergrande, whose precarious financial situation worries the markets, presented on Wednesday the draft of a plan for restructuring its debt, which will however still have to be approved by its creditors.
The promoter, on the verge of bankruptcy, is strangled by an abysmal debt which had been estimated in 2021 at some 300 billion US dollars.
Since then, the financial health of Evergrande has worried the markets, because the collapse in China of a group, which once claimed 200,000 employees, would have disastrous consequences for the economy.
Evergrande is the former number one in real estate in China, a pillar sector for the country’s growth, which represents more than a quarter of its Gross Domestic Product and which supports an army of low-skilled workers.
“Over the next three years, the main task (of the group) will be to ensure the delivery of goods (to customers), to strive to resume work and production and to maintain an orderly operation of its business”, underlined Evergrande in a statement released late Wednesday.
To achieve this, 250 to 300 billion yuan will be needed (from 33.7 to 40.4 billion euros), said the group in this document addressed to the Hong Kong Stock Exchange where it is listed.
Evergrande notably offers its creditors to exchange their debt for new bonds and a stake in two subsidiaries, including its ambitious electric vehicle branch.
Creditors must decide by the end of March on this restructuring offer.
The group was originally due to unveil in July 2022 the outline of a plan supposed to ensure its survival, but it had been postponed indefinitely.
In addition to real estate, Evergrande is present in a multitude of sectors, including the automotive sector, which it presented as a sector of the future. Founded in 2019, Evergrande NEV immediately showed its ambition to compete with the American manufacturer Tesla.
But this subsidiary has so far sold less than a thousand vehicles, according to figures released Wednesday by Evergrande.
The former real estate champion has built his fortune thanks to the construction boom of recent decades in China, in a country where the acquisition of property is often a prerequisite for marriage and an investment.
But the sector has been weakened since 2020 by the economic slowdown and by a tightening of regulations which has considerably reduced access to credit for promoters.
These measures marked the beginning of Evergrande’s financial worries.
