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China Evergrande is making a new attempt at debt restructuring: exchanging foreign bonds for shares in two subsidiaries.
The struggling real estate group China Evergrande is offering creditors to exchange their foreign bonds for shares in two subsidiaries. The creditors could each receive 30 percent of Evergrande Property Services and the Evergrande New Energy Vehicle. The real estate group is the most indebted in the world at around $300 billion and was no longer able to service its foreign bonds in 2021. Creditors are expected to recover only a fraction of the $19 billion they loaned to the company. Evergrande is currently involved in a dispute with its creditors over debt restructuring. According to a report from www.faz.net, impact on...
China Evergrande is making a new attempt at debt restructuring: exchanging foreign bonds for shares in two subsidiaries.
The struggling real estate group China Evergrande is offering creditors to exchange their foreign bonds for shares in two subsidiaries. The creditors could each receive 30 percent of Evergrande Property Services and the Evergrande New Energy Vehicle. The real estate group is the most indebted in the world at around $300 billion and was no longer able to service its foreign bonds in 2021. Creditors are expected to recover only a fraction of the $19 billion they loaned to the company. Evergrande is currently involved in a dispute with its creditors over debt restructuring.
According to a report by www.faz.net,
Impact on the market and the financial industry
The possible debt restructuring of Evergrande by exchanging bonds for shares in subsidiaries can have various effects on the market and the financial industry.
First, debt restructuring could result in creditors recovering some of their investments. However, it is expected that they will only receive a fraction of the original amounts. This could lead to significant losses for creditors, which in turn could have an impact on the financial market.
Second, Evergrande's debt restructuring could result in the company being able to stabilize its financial situation and potentially return to full payments to its creditors. This could increase investor confidence in the company and the real estate market as a whole.
Third, Evergrande's potential debt restructuring could impact other companies in the industry. If Evergrande is successful, other heavily indebted real estate companies could pursue similar debt restructuring strategies to solve their financial problems. This could lead to market consolidation and make it more difficult for other companies to compete.
Overall, the situation surrounding Evergrande and its debt restructuring plans remains uncertain. The impact on the market and the financial industry will depend on various factors, including the terms of the debt restructuring and the reaction of creditors and investors.
Read the source article at www.faz.net