China Evergrande (03333. HK) issued an announcement. According to the announcement, sales have not met expectations since Evergrande announced the terms on overseas debt restructuring on March 22 this year. Therefore, after consultation with its advisers and creditors, Evergrande believes that it is necessary to revisit and adjust the terms of the proposed restructuring to match its current situation and the needs of creditors.
The meetings on the proposed restructuring scheduled for 25 September and 26 September 2023 will not be held. If there are any changes to the terms of the proposed reorganization, Evergrande will promptly inform the public through a separate announcement.
According to the announcement, Evergrande is currently facing a very serious overseas debt problem. It is understood that the overseas debt involved in the original meeting mainly consists of two parts, including US dollar senior guarantee notes issued by Evergrande with a total principal amount of US$13,922.5 million and US dollar senior notes issued by Jingcheng Co., Ltd. and guaranteed by Tianji Holdings Co., Ltd. with a total principal amount of US$5.226 billion, totaling about US$19.149 billion.
Evergrande's debt is indeed like Mount Tai's topping. According to the latest data, as of the end of July 2023, Evergrande Real Estate, a major subsidiary of China Evergrande, had accumulated about 277.501 billion yuan of unpaid mature debts, and Evergrande Real Estate had overdue commercial bills totaling about 207.5 billion yuan. These huge debts make Evergrande's situation increasingly difficult.
At the same time, according to Evergrande's sales in the first half of the year, its performance is also worrying. According to the financial report, in the first half of 2023, China Evergrande achieved contracted sales of only 33.413 billion yuan, and the cumulative sales collection was only 27.1 billion yuan. This sales performance is obviously quite dismal compared to other real estate companies.
Evergrande's current situation raises concerns about its future. Faced with the huge scale of debt and poor sales performance, Evergrande must urgently re-examine its debt restructuring plan. By negotiating with creditors and adjusting terms, Evergrande should be able to seek a more viable solution like Sunac to ease the financial pressures it faces and achieve sustainable development.
In addition, Evergrande needs to actively explore other ways to improve its financial position. For example, measures such as improving sales performance, optimizing business models, and reducing expenses will help reduce Evergrande's financial burden and improve its solvency.
However, for Evergrande, it still takes great effort and time to get out of the current predicament. For the owners who bought the Evergrande rotten building, they also need more patience and more time to wait. May there be no more rotten buildings in the future!
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