Evergrande, the three Hong Kong-listed companies China Evergrande (03333.HK), Evergrande Property (06666.HK), and Evergrande Automobile (00708.HK), suspended trading at the same time in the early trading of March 21, announcing that they will release inside information.

On the morning of the 22nd, the three companies announced that they are expected to postpone the publication of the 2021 annual performance report.

Meanwhile, the three companies will continue to be suspended.

  The company stated that since the second half of last year, the company's operating conditions have undergone major changes, and the auditor has added a large number of additional audit procedures this year. Coupled with the relevant impact of the new crown epidemic, according to the information currently available to the company, the company cannot complete it on time. audit procedure.

Audited results for the year ended 31 December 2021 will not be published on or before 31 March 2022.

  At the same time, Evergrande Property also disclosed an insider transaction, that is, in the process of reviewing the financial report for the year ended December 31, 2021, it was found that Evergrande Property had deposits of approximately RMB 13.4 billion, which were provided for third parties. The pledged security deposit has been enforced by the relevant banks.

  The fact that the three companies of Evergrande were unable to publish the results of the previous year as the journal did not surprise the outside world, because Evergrande is seeking to restructure its debts.

According to the news, on March 17, Evergrande Real Estate Group Co., Ltd. issued a notice on holding the first bondholder meeting in 2022 for the public issuance of corporate bonds to professional investors (the first phase) in 2020. The market expects the group A related meeting may be held this week to introduce the debt restructuring framework to investors.

  According to China Evergrande's June 30, 2021 financial report, as of June 30, 2021, the company's total liabilities were 1.966 trillion yuan, and its total interest-bearing debt was 576 billion yuan.

Since the fourth quarter of last year, the group has been unable to meet its normal debt repayment obligations.

  On December 6 last year, Evergrande announced that, taking into account the current operational and financial challenges, its board of directors decided to establish a risk mitigation committee, whose members include the chairman of the board of directors of Evergrande Xu Jiayin, the chief financial officer of Evergrande and the company's executive directors. Pan Darong, Deputy General Manager of Guangdong Holding Group Liu Zhihong, Yuexiu Group Chief Capital Operations Officer Li Feng, Guosen Securities Compliance Director Chen Yong, Beijing Zhong Lun Law Firm Partner Hao Han, and China Cinda Vice President Zhao Limin.

  After that, on January 20, 2022, the Fifth Session of the Thirteenth People's Congress of Guangdong Province opened. Relevant leaders said that in accordance with the principle of marketization and the rule of law, the debt risk resolution and disposal of Evergrande Group and other real estate enterprises will be steadily promoted.

The next day, Evergrande disclosed that it has hired additional intermediaries, including China International Capital Corporation Limited and Bank of China International Asia Co., Ltd. as financial advisors, and Zhong Lun Law Firm Limited Legal Liability Partnership as legal advisors to assist in developing debt risks. Dissolve work.

  At that time, the company said that it would introduce a debt restructuring plan within six months, and recent market news showed that the first plan may come out in March.

At present, all parties in the market are waiting for Evergrande's debt restructuring plan to be released, because this may be the largest debt restructuring of a Chinese company.

  On the sixth day of the Lunar New Year, Evergrande’s internal mobilization meeting, Xu Jiayin, chairman of the board of directors of Evergrande, said, “2022 is a critical year for us to get out of the predicament and move into the future. It is the most important task and work of this year to complete the goal of securing the handover of the building throughout the year."

  At this mobilization meeting, Xu Jiayin made it clear that he would not bail out the company by selling assets at a low price.

However, some project-level asset disposals are still progressing.

For example, on February 25, the company announced that it had signed a cooperation agreement with Everbright Trust and Minmetals Trust to transfer its four projects in Chongqing, Dongguan, Foshan and Guangzhou to the two trusts, and the latter would take over at the same time. The operation management of the project company, investing funds into the project company to ensure the subsequent development and construction of the project and the delivery of the building.

  Through this equity transfer, Evergrande can recover about 1.95 billion yuan of the initial investment in the project, and can alleviate the debt involved in the project of about 7.01 billion yuan.

According to Evergrande's expectation, it will generate a premium of about 15.9028 million yuan for the sale.

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