China Evergrande Group reached a deal on Tuesday with investors holding 86.3 billion yuan ($12.66 billion) of its unit to not ask the debt-laden property developer to repurchase their holdings.
Concerns have mounted in recent days that the country’s second-biggest property developer was headed for a major cash crush if it could not get government approval for a restructuring plan for its unit Hengda Real Estate, that has languished for four years.
A leaked document – that Evergrande says is fabricated – last week said the company asked for government help to approve the Hengda restructuring plan, or it would be forced to repay 130 billion yuan raised from investors before Jan. 31 for the Shenzhen backdoor listing.
The company has already finalised talks with investors that hold 15.5 billion yuan of Hengda, it said, and is currently talking to the remainder who hold around 28.2 billion yuan.
Evergrande said under Tuesday’s agreement, “investors agreed not to require the repurchase of their equity interests in Hengda Real Estate and will continue to hold their interests.”
Reuters