China Evergrande offers bond and equity swaps in debt restructuring

The developer also said on Monday that it expected to sign a supporting agreement with general creditors by the end of March, with the restructuring to take effect from Oct. 1. Sidley Austin and Houlihan Lokey are Evergrande's advisers, while Moelis & Company and Kirkland & Ellis are the advisers of the group of bondholders.

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 tied to 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. "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 Company will use its best endeavours to restore a healthy ecosystem of capital and business, repair its capital structure and stabilise its business operations." 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 and equity-linked instruments.

Evergrande, which began one of China's biggest debt restructuring processes early last year, said on Monday that a key bondholder group had agreed to its proposed terms. The developer also said on Monday that it expected to sign a supporting agreement with general creditors by the end of March, with the restructuring to take effect from Oct. 1.

Sidley Austin and Houlihan Lokey are Evergrande's advisers, while Moelis & Company and Kirkland & Ellis are the advisers of the group of bondholders.