Evergrande’s Foreign Bondholders Push Back as Hearing Looms

Property developer China Evergrande Group is struggling to reach a deal with foreign bondholders, raising the possibility that a court will tell the company to wind down, the Wall Street Journal reported. Evergrande, once China’s largest property developer by sales, sold more than $20 billion of dollar bonds during a debt-fueled spending spree. The company defaulted on its foreign debt in late 2021, and has since been embroiled in a difficult negotiation with international bondholders. The latest bone of contention: whether Evergrande should be allowed to use its assets outside of China to pay debt incurred within the mainland. Evergrande’s creditors in mainland China are pushing the company to use some of its assets in Hong Kong and elsewhere to pay them back, putting them in direct conflict with holders of its U.S. dollar bonds. Evergrande’s dollar bonds are now held by a mix of distressed funds and real-money investors. The company’s representatives are due to appear before Hong Kong’s High Court on March 20. Evergrande was sued last June by a small creditor, which asked the court to wind up the company. Evergrande won a reprieve from the court at a hearing in November and it could be given more time again, but negotiations since the last extension have made little progress, the people said. Evergrande has until March 6 to file evidence that would persuade the judge to grant it another extension. Read more. (Subscription required.)