HONG KONG : China Evergrande has proposed a new debt restructuring plan for offshore bondholders, offering to swap their debts into about a 30 per cent equity stake in each of the developer's two Hong Kong-listed subsidiaries, according to two sources familiar with the matter.
The property firm's offshore bondholders holding about $19 billion of debt are likely to take a major haircut on their investments if they agree to the new terms, said the two sources who declined to be named because they were not authorised to speak with media.The property developer's dollar bonds last traded at about 2.
Their combined market value was only around HK$9 billion as of Wednesday morning, with the parent holding 52 per cent of the property arm and 59 per cent of the vehicle firm. Evergrande was also banned from issuing new dollar bonds, a key part of its original restructuring plan, while its flagship mainland unit was being investigated by regulators.
Evergrande's original plan, which was backed by the ad hoc group of bondholders before it was thrown off course, offered options including equity-linked instruments backed by the parent Evergrande and the two Hong Kong-listed subsidiaries.
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