Detailed updates on the high-stakes House Energy and Commerce Committee hearing.
(Repeats item first carried late on Wednesday)
By Clare Jim and Xie Yu
HONG KONG, March 22 (Reuters) – China Evergrande Group on Wednesday announced plans for the restructuring of its $22.7 billion in offshore debt, which could set a template for distressed rivals and shape investor sentiment on the country's embattled property sector.
The world's most indebted property developer gave creditors a basket of options to swap their debt into new bonds and equity-linked instruments backed by the group and its two Hong Kong-listed companies, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.
With more than $300 billion in total liabilities including offshore debt, Evergrande has been at the centre of a property debt crisis in which multiple Chinese developers defaulted over the past year, forcing many to enter debt restructuring talks.
While the long-awaited proposals could provide breathing space for the developer that was teetering on the brink of collapse a year ago, few analysts expect its balance sheet to recover fully any time soon.
"The proposed restructuring will alleviate the company's pressure of offshore indebtedness and facilitate the company's efforts to resume operations and resolve issues on shore," Evergrande said in the filing.
The developer expects the proposed restructuring to facilitate an orderly resumption of business operations and gradual generation of cash flow for debt repayment.
Court and arbitration cases involving 363.5 billion yuan ($52.83 billion) of debt are ongoing in mainland China, Evergrande said. On a standalone basis, these will not materially affect the offshore restructuring, it added.
In the two main options proposed, creditors can either swap all of their holdings into new notes with maturities of 10-12 years, or convert them into different combinations of new notes of five to nine years and equity-linked instruments.
The developer said it expects to agree restructuring support agreements with different groups of bondholders by March 31, with restructuring taking effect on Oct. 1.
Evergrande on Monday said that a key bondholder group had agreed to its proposed terms. It also said the company expects its overdue financial reports for 2021 and 2022 to be released in April and May.
Trade in its Hong Kong shares has been suspended since last March, pending release of the financial statements, and Evergrande said in Wednesday's filing that it will remain suspended until further notice.
Evergrande also gave an update on its business on Wednesday, saying that additional financing of 250 billion to 300 billion yuan will be required as it resumes operations over the next three years.
"As a result, the company’s ability to repay unsecured debt … is relatively weak, it said, adding that free cash flow is expected to increase gradually from the fourth year, assuming the company can resume normal operations.
Regarding its electric vehicle business, which some new notes will be linked to, Evergrande said it may have to be shut down unless it obtains new funding.
Sidley Austin and Houlihan Lokey are Evergrande's advisers, while Moelis & Company and Kirkland & Ellis are advising the group of bondholders. ($1 = 6.8802 Chinese yuan renminbi) (Reporting by Clare Jim and Xie Yu Editing by Himani Sarkar and David Goodman)
LONDON (Reuters) -The banking turmoil sparked by the collapse of Silicon Valley Bank is not yet over, and a significant number of banks will fail within two years, the CEO of hedge fund Man Group told a Bloomberg conference in London on Wednesday. Asked whether the crisis in the sector was over, Man Group's Luke Ellis told delegates he did not think so. Market chaos forced the emergency rescue of Credit Suisse by Swiss rival UBS over the weekend in a move that has brought some calm to markets.
Boris Johnson, the former prime minister of the United Kingdom, denied wrongdoing in an inquiry into the Partygate scandal, the breach of Covid-19 protocols by his government that led to his eventual resignation.
FRANKFURT (Reuters) -The European Central Bank is watching for signs of stress in the banking sector from the ongoing financial turmoil but a full-blown crisis is unlikely for now, the ECB's top brass said on Wednesday. Investors are pondering whether the ECB will be able to continue raising rates to fight inflation given turmoil in the banking sector that has seen two U.S. lenders go under and Swiss giant Credit Suisse need a last-minute rescue. The ECB's chief economist Philip Lane said market jitters may turn out to be "a non-event" for monetary policy, or could affect it at the margins, but the odds on a crisis that completely rewrites the outlook remained long.
The Federal Reserve raised its key interest rate by another quarter-percentage point on Wednesday (March 22), signaling confidence that recent panic in the banking sector will be contained.
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