Evergrande fails to meet CSRC’s regulation on issuing offshore bonds

Debt troubled real estate giant Evergrande announced on Sunday that due to an ongoing investigation into its main onshore unit Hengda Real Estate Group Co, the cooperation has failed to meet China Securities Regulatory Commission’s (CSRC) rule on issuing new bonds and repay its $19 billion offshore debt. 

As of close of trade, Evergrande suffered heavy losses in the Hong Kong stock market, falling by more than 20 percent. 

On Friday, Evergrande postponed its creditors meetings scheduled this Monday and Tuesday, which was already delayed twice in August. 

Failing to issue new debt may halt the troubled corporation’s plan to reorganize its over 19 billion offshore debts. In March, Evergrande attempted to roller over its original debt by replacing it with new notes with maturities of 10 to 12 years. 

The once largest real estate company in China is now in deep debt crisis, and facing difficulties due to the weak real estate market. From its previous disclosure, Evergrande suffered a net profit loss of 524.2 billion yuan in 2021, and that of 52.7 billion yuan in 2022. In the first half of 2023, it struck a 17.9-billion-yuan net profit loss, causing the company to be insolvent, with a consolidated net asset of -386.7 billion yuan.

The ongoing investigation was posed by CSRC, on August 16, Hengda posted a notification of a lawsuit, saying the company is being charged of suspected violation of information disclosure.