In Friday’s submitting, Evergrande mentioned it has made “optimistic progress” in its offshore restructuring course of, however added that it is nonetheless working with collectors and advisers on conducting a due diligence of the corporate.
“Given the scale and complexity of the Group and the dynamics the Group finds itself in, the due diligence course of stays ongoing,” it mentioned, including that the work may be accomplished within the “close to future.”
The dearth of a concrete proposal highlights the uncertainties surrounding Evergrande’s opaque restructuring of its big debt and sprawling enterprise operations at a fragile time for China’s property sector and economic system.
After collectors demanded updates and threatened to take authorized actions, Evergrande pledged in January that it might launch “a preliminary restructuring proposal” inside six months. In June, it assured buyers that it was on observe to ship the plan by the tip of July.
Why is Evergrande essential?
Since Evergrande’s default, a number of different main builders, together with Kaisa, Fantasia, and Shanghai-based Shimao Group, have additionally sought safety from collectors.
“The mortgage boycotts are a double risk to builders and to the housing market,” mentioned analysts at Capital Economics in a report late final month.
They’ve drawn consideration to the issue of cash-strapped builders being unable to finish properties that they’ve already offered, which is “pushing aside new homebuyers.” The boycotts have additionally made banks extra cautious about issuing mortgages, which might dent property gross sales additional, they added.
In a report final week, S&P International Rankings estimated China’s property gross sales might drop by a 3rd this yr due to mortgage strikes, as folks consider builders will not have the ability to full presold models in time— the most typical approach they promote properties within the nation.
“With out gross sales, many extra builders will collapse, which is each a monetary and an financial risk,” mentioned Capital Economics analysts.