On Friday, September 22, late at night, Hong Kong-listed China Evergrande "quietly" issued a new announcement in the dead of night, which roughly reads as follows.
China Evergrande originally planned to hold a meeting on the arrangement of overseas debt restructuring from September 25 to September 26, but it was cancelled due to sales that were not as expected, and the timing of the meeting was not mentioned in the announcement.
It is worth noting that this is not the first voting meeting of Evergrande to cancel/postpone the overseas debt restructuring agreement.
Evergrande's announcement of its overseas debt restructuring plan on March 22 is seen as entering a new stage, and Evergrande's debt reduction work has finally entered a new stage.
After the debt restructuring agreement was formulated, it needed to obtain the consent of creditors, otherwise it was just a dead letter, and Evergrande decided to hold a meeting from August 22 to August 23, but it did not do so.
On August 16, Evergrande changed its words for the first time, announcing that the agreement arrangement meeting would be postponed to August 28 on the grounds that Evergrande Automobile's recent strategic investment from the Middle East tycoons needed to give creditors more time to consider.
When the meeting was not held on August 28, Evergrande once again reneged on the appointment and proposed to postpone the meeting to September 25-26, this time for three reasons, one is to give creditors more time to consider as before; Second, the shares of Evergrande Group resumed trading on August 28, and the situation has changed; Third, media reports incorrectly described the restructuring recognition process for Evergrande to apply for protection in the United States.
After that, the announcement of the cancellation of the meeting was issued three days before the vote on the restructuring plan, which was the third consecutive time that Evergrande had cancelled the appointment.
Some people may think that Evergrande has a total debt of 2.4 trillion yuan after all, and such a large scale really needs to be cautious. Sorry, you may be mistaken, 2.4 trillion yuan refers to the total liabilities of Evergrande Group, including interest-bearing and interest-free liabilities, including domestic and overseas liabilities, and the debts involved in the restructuring plan only refer to overseas interest-bearing liabilities.
How much is involved? According to the announcement of Evergrande's overseas restructuring plan issued on March 22, as of December 31, 2021, Evergrande's overseas interest-bearing liabilities were 140.284 billion yuan.
Taking Evergrande's latest 2023 half-year report as a benchmark, 140.284 billion yuan accounted for only 5.87% of the total liabilities of 2.39 trillion yuan, which was 22.45% of the borrowing liabilities of 624.77 billion yuan.
That's right, it was "such a little" of money that made Evergrande difficult, staged a delay in the Dafa, and constantly postponed the holding of overseas debt restructuring meetings. The more than 140 billion yuan debt plan is so difficult to advance, how can Xu Jiayin face the total debt of 2.39 trillion yuan?
Sunac, another huge domestic "thunderstorm" real estate enterprise, held an overseas debt restructuring meeting on September 18 and was approved by creditors, making substantial progress in debt reduction.
One small detail is interesting, both Evergrande and Sunac applied to the US court for Chapter 15 certification, Sunac applied for it on September 19, after the restructuring plan was approved, and Evergrande applied before the meeting. Although the two companies are in the same predicament, the time they have spent dealing with the problem reflects the real state and mentality of each other.
Returning to Evergrande's meeting to cancel the overseas debt restructuring plan, the main reason for not holding it was that "the Group's sales were not as good as the Company expected".
This was said on 22 September, which was not how it was said less than a month ago.
On August 27, China Evergrande released an unaudited 2023 interim results announcement, which mentioned that "the company actively planned to resume sales, successfully seized the small Yangchun property market that appeared at the beginning of the year, and achieved a substantial year-on-year increase in sales performance".
The two announcements were issued less than a month apart, and the description of the sales situation is very different, whether Evergrande's sales have fallen short of expectations since July 1 or have not been good since the release of the overseas debt restructuring plan on March 22. The description of the slap in the face before and after makes people unable to believe Evergrande's official announcement, after all, Xu Jiayin is not the first time to break his word.
For example, Boss Xu said in the face of Evergrande Wealth investors that he would not let everyone lose and would be responsible to the end. As a result, the ex-wife quietly paid for the wealth management products issued by Evergrande Wealth in advance, but fortunately it was later exposed, and on August 31, Evergrande Wealth directly announced on the official website that there was no money and suspended the monthly payment of 2,000 yuan.
Therefore, it is difficult for me to fully believe the authenticity of Evergrande's change of words, at least the reason for canceling the overseas debt restructuring meeting is not all that the sales performance is less than expected (most likely it is not better at all). So what else could be the reason? Some clues can be seen from the recent major events around Evergrande.
On September 15, the State Financial Regulatory Administration approved the newly established Port Life Insurance to take over the assets and liabilities of the seriously insolvent Evergrande Life. A few days later, the market reported that Zhu Jialin, the former chairman of Evergrande Life, had been taken away for investigation and was in a state of missing contact.
On September 16, the 16th day after Evergrande Wealth announced the suspension of the payment of funds for wealth management products, even the police issued a case report, and a number of staff members of Evergrande Wealth were taken criminal compulsory measures for suspected crimes, one of whom was presumed to be Du Liang, the legal representative of Evergrande Wealth.
Evergrande Life and Evergrande Wealth are two important flat maps of the financial industry of Evergrande Group, which made great contributions to the "blood transfusion" of Evergrande in previous years, but now there are many problems, regulatory authorities have taken action, and even the public security organs have taken action.
Combined with the above two publicly reported incidents related to Evergrande and the announcement of China Evergrande's cancellation of its overseas debt restructuring meeting late at night on September 22, do you smell a little different? Wu Xiaohui of the Anbang department and Shu Yuhui, the boss of Quanjian Group, and other capital tycoons have been imprisoned one after another, and if Lao Xu embarks on the same path, then there is indeed great uncertainty in the overseas debt restructuring plan.
Lao Xu was given time to clean up the mess and provided a lot of resources, and if there was not much progress, it would have to be covered by the state, which involved the problem of settling new accounts and old accounts together.
In any case, time is running out for Xu Jiayin and Evergrande, and December 15 is the deadline mentioned in the restructuring agreement.