In Friday’s filing, Evergrande said it has made “positive progress” in its offshore restructuring process, but added that it’s still working with creditors and advisers on conducting a due diligence of the company.
“Given the size and complexity of the Group and the dynamics the Group finds itself in, the due diligence process remains ongoing,” it said, adding that the work might be completed in the “near future.”
The lack of a concrete proposal highlights the uncertainties surrounding Evergrande’s opaque restructuring of its huge debt and sprawling business operations at a delicate time for China’s property sector and economy.
After creditors demanded updates and threatened to take legal actions, Evergrande pledged in January that it would release “a preliminary restructuring proposal” within six months. In June, it assured investors that it was on track to deliver the plan by the end of July.
Why is Evergrande important?
Since Evergrande’s default, several other major developers, including Kaisa, Fantasia, and Shanghai-based Shimao Group, have also sought protection from creditors.
“The mortgage boycotts are a double threat to developers and to the housing market,” said analysts at Capital Economics in a report late last month.
They have drawn attention to the problem of cash-strapped developers being unable to complete properties that they have already sold, which is “putting off new homebuyers.” The boycotts have also made banks more cautious about issuing mortgages, which could dent property sales further, they added.
In a report last week, S&P Global Ratings estimated China’s property sales could drop by a third this year because of mortgage strikes, as people believe developers won’t be able to complete presold units in time— the most common way they sell homes in the country.
“Without sales, many more developers will collapse, which is both a financial and an economic threat,” said Capital Economics analysts.