It is officially announced that Evergrande will restructure!


It was officially announced that Evergrande was about to restructure and finally embarked on this path!How long has evergrande’s debt crisis been unfolding?I don’t think a lot of people remember.On July 19 last year, GUANGDONG Development Bank “fired the first shot” to collect debts from Evergrande, thus kicking off evergrande’s debt crisis.Xu jiayin could not have imagined that the first attack was the local bank in Guangzhou where he made his fortune.Maybe because of the proximity, they have a better understanding of Evergrande and are worried about losing their money.The debt crisis, like a spark, is imminent.Evergrande did not cover up, creditors came to the door to collect debts, projects across the country have been suspended.The most troublesome thing is all kinds of rumors, which will completely destroy evergrande’s credit.Xu jiayin tried his best to reverse the situation. He sold off a lot of assets and raised more than 30 billion yuan. Some of the domestic debts and US dollar debts were repaid, but he was unable to deal with the total debts of 2 trillion yuan.Finally, on December 3rd, came the showdown.Evergrande has no money to pay off its debts, so what to do with all this debt?In the past two months, Evergrande has been actively promoting the resumption of work and production and has achieved good results. It delivered 39,000 houses in December and announced that it would deliver another 30,000 in January.Happily for the homebuyer, the house will not be left unfinished, although there may be delays.But evergrande has not said how to deal with the debt.To be honest, no one’s money is scraped from evergrande. If Evergrande fails to pay back the money, it will inevitably cause the partners to lose money, fall into business difficulties, or even be dragged down.Recently, a number of listed companies announced a large loss in 2021 due to the expectation of Evergrande business tickets.So some creditors can’t wait and say they will take legal action.In a flurry of announcements, Evergrande pleaded with creditors for more time and added To its board Liang Linlin, chairman of Cinda Hong Kong, a state-owned company that specializes in handling distressed assets.On the evening of January 26, Evergrande issued a bombard announcement, saying that it would evaluate the group’s situation and formulate a restructuring plan to protect the rights of stakeholders.It will listen to the opinions and suggestions of all parties, including creditors, and strive to come up with a preliminary restructuring plan within six months.There has been a lot of speculation about where Evergrande will go, and now this announcement is a confirmation that the whole company will be restructured.In fact, there are two ways of restructuring, one is debt restructuring, one is bankruptcy restructuring.Debt restructuring refers to the situation that the debtor is insolvent, and then negotiate a restructuring plan with creditors, including repayment through assets, debt into equity and so on.Ordinary creditors have to make concessions, such as interest waivers, reduced solvency rates and so on.Because there are only so many assets, but debts are so high that they cannot be repaid in full, creditors must lose some.Bankruptcy reorganization means that the larger creditors apply for debtor bankruptcy reorganization to the law, and then the relevant institutions issue a reorganization plan. The final result is that the assets are divided by all parties, and the enterprise eventually ceases to exist.The most typical is HNA Group, embarked on the road of bankruptcy restructuring.Evergrande has pleaded with its foreign creditors to give them more time and refrain from any aggressive legal action, fearing they could go to court and take the second route.Therefore, from the current point of view, Evergrande is to carry out debt restructuring.There is little to be gained by creditors acting aggressively.After all, Evergrande is now actively resuming work and production to maintain operations. In this way, Evergrande can recover a lot of money, which is good for creditors.However, evergrande’s debt is so large and there are so many creditors that it will take time to work out a plan that satisfies all parties.Many people may be concerned about what will happen to Xu Jiayin after the reorganization?Mr. Xu is now evergrande’s largest shareholder, with his wife’s stake totalling more than 50 percent, which is expected to be repaid after the restructuring.In the announcement, Evergrande also mentioned whether there are more guarantees in the restructuring. For example, the chairman’s personal assets are guaranteed, and Evergrande said it would refer to the advice of professional advisers.From here can see, Xu jiayin’s personal assets are not affected, or their own.That includes real estate, cars, private jets, and cash.How much money evergrande’s creditors will eventually get depends on the final restructuring plan, but if they get the money, they can at least reduce some of their losses.For more exciting content, come to the Digital Finance think Tank

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