Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Evergrande CEO in Hong Kong for restructuring, asset sale talks, sources say

Stock MarketsOct 15, 2021 08:51PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: China Evergrande Group CEO Xia Haijun attends a news conference on the company's interim results in Hong Kong, China August 30, 2016. REUTERS/Bobby Yip

By Clare Jim and Julie Zhu

HONG KONG (Reuters) -Evergrande Group's chief executive is holding talks in Hong Kong with investment banks and creditors over a possible restructuring and asset sales, two people said, as the Chinese developer battles against default on more than $300 billion in debts.

CEO Xia Haijun, a confidant of chairman Hui Ka Yan and who runs Evergrande's day-to-day operations including financing, has been in Hong Kong, where the property firm has a major presence, for more than two months, the two sources told Reuters.

A third source said Xia was talking to banks and creditors in Hong Kong, but did not say what was being discussed.

Shenzhen-headquartered Evergrande, which is reeling under more than $300 billion in liabilities, has left its offshore investors in the dark about repayment plans after already missing three rounds of interest payments on its dollar bonds.

Xia's talks with investment banks and creditors in Hong Kong has not previously been reported.

One of the sources said Xia needed to communicate with foreign banks on loan extensions and repayments. The source declined to disclose the identity of the creditors that Xia had spoken to in recent days.

"Xia also needs to sort out how many off-balance sheet debts the group has offshore, because many were underwritten at subsidiary levels and he himself may not be even aware of (that)," he said. "Before that they cannot work on restructuring and talk to bondholders."

Evergrande has been scrambling to divest some of its assets to raise cash - efforts that have not yet yielded much success - as concerns have grown in recent weeks about a possible collapse and the impact on global markets and China's economy.

Chinese state-owned Yuexiu Property has pulled out of a proposed $1.7 billion deal to buy Evergrande's Hong Kong headquarters building over worries about the developer's dire financial situation, Reuters reported on Friday.

A Chinese central bank official said on Friday the spillover effect of Evergrande's debt problems on the banking system was controllable and the risk exposures of individual financial institutions were not big.

Evergrande and Xia did not respond to Reuters requests for comment.

The sources, who have direct knowledge of the development, declined to be named due to the sensitivity of the matter.

PUBLIC APPEARANCE

Evergrande Chairman Hui has not appeared in public in recent weeks or announced plans to address the group's woes, leaving investors wondering if they would have to book losses when the 30-day grace periods end this month for unpaid bond coupons.

Last month, the developer issued a statement saying Hui had urged company executives to ensure the quality delivery of properties and redemption of wealth management products.

Xia, who is also vice president of the board, joined the company in 2007 and is responsible for Evergrande's capital operation and management, as well as legal affairs and overseas affairs, according to the company's website.

He has been in Hong Kong since July, according to one of the sources. The second source said Xia had been meeting Chinese investment banks in the city to explore possible asset sales.

Evergrande, once China's top-selling developer, has said that it is looking to dispose of stakes in assets including its services and electric vehicle units to raise funds.

The developer is finalising details to sell 51% of its Evergrande Property Services unit to Hopson Development for HK$20 billion ($2.57 billion).

Investment bank Moelis (NYSE:MC) & Co and law firm Kirkland & Ellis, representing bondholders who currently hold $5 billion worth of Evergrande nominal offshore bonds, demanded last week more information and transparency from Evergrande.

The developer said last month it had appointed Houlihan Lokey (NYSE:HLI) and Admiralty Harbour Capital as joint financial advisers to examine its financial options, as it warned of default risks amid plunging property sales.

($1 = 7.7792 Hong Kong dollars)

Evergrande CEO in Hong Kong for restructuring, asset sale talks, sources say
 

Related Articles

2 Cloud Storage Stocks to Buy Now
2 Cloud Storage Stocks to Buy Now By StockNews - Dec 07, 2021

The demand for cloud storage solutions is expected to grow significantly in the near term, given their ease of use and increased applications across several industries. So, we...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Millennial Metals
Millennial Metals Oct 15, 2021 10:48PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The chinese government just got a lot of real estate for cheap
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email