Thu 08/05/2021 09:07 AM
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The Supreme People’s Court of China has issued a notice to concentrate all civil lawsuits against China Evergrande Group and affiliated entities to Guangzhou Intermediate People’s Court, a move that signifies the gravity of the situation involving one of China’s largest real estate developers, according to four sources familiar with the matter. Continue reading below as our Asia Core Credit team analyzes the Evergrande Group litigation cases and click here to request a trial for access to our analysis and reporting on hundreds of other stressed, distressed and performing credits.

Evergrande’s hometown court, Shenzhen Intermediate People’s Court, does not have jurisdiction over its cases, which have been elevated to the provincial level as the Guangdong government is coordinating the situation, said the sources.

Other local courts are no longer accepting litigation against Evergrande and affiliates, said two of the sources.

Concentrating cases at the Guangzhou court helps coordinate the court’s response to asset preservation and other pre-litigation measures as well as lawsuits against the company and affiliates filed by creditors, the sources noted. They compared the situation to that of China Fortune Land Development, which saw civil lawsuits against it being concentrated at Langfang Intermediate People’s Court in its home province of Hebei.

The Supreme People’s Court last year ordered that all debt-related lawsuits against Tunghsu Group and subsidiaries be transferred to and concentrated at Shijiazhuang Intermediate People’s Court, even though the company is based in Beijing. The court noted Tunghsu’s strong ties with Shijiazhuang, also in Hebei province, where it was launched and which calls Tunghsu a homegrown company.

Below is China Evergrande Group’s capital structure:


































































































































































































































































































































































































China Evergrande - Pro Forma as of 04/06/2021


12/31/2020

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Bank and Other Loans

514,020.3

78,237.5



Total Bank and Other Loans

514,020.3

78,237.5

6.0x

Zhongyu Sub

10.0

1.5

Dec-17-2038


Evergrande R1 Senior

1,062.0

161.6

Dec-29-2036

7.500%

Evergrande R1 Sub

118.0

18.0

Dec-29-2036


PR Zhongyu 1

299.8

45.6

Dec-17-2036

7.300%

Zhongyu Senior 2

880.0

133.9

Dec-17-2036

7.500%

Total Onshore ABS

2,369.8

360.7

6.0x

20 Evergrande 05

2,100.0

319.6

Oct-19-2025

5.800%

20 Evergrande 04

4,000.0

608.8

Sep-23-2025

5.800%

20 Evergrande 03

2,500.0

380.5

Jun-05-2023

5.600%

20 Evergrande 02

4,000.0

608.8

May-26-2023

5.900%

20 Evergrande 01

4,500.0

684.9

Jan-08-2023

6.980%

19 Evergrande 02

5,000.0

761.0

May-06-2024

6.800%

19 Evergrande 01

15,000.0

2,283.1

May-06-2023

6.270%

15 Evergrande 03

8,200.0

1,248.1

Jul-08-2022

6.980%

Total Onshore Bonds

45,300.0

6,895.0

6.5x

$4680.5 Million 8.75% Senior Notes Due 2025

30,750.7

4,680.5

Jun-28-2025

8.750%

$700 Million 10.5% Senior Notes Due 2024

4,599.0

700.0

Apr-11-2024

10.500%

$951 Million 9.5% Senior Notes Due 2024

6,248.1

951.0

Mar-29-2024

9.500%

$1000 Million 12% Senior Notes Due 2024

6,570.0

1,000.0

Jan-22-2024

12.000%

$1344.9 Million 7.5% Senior Notes Due 2023

8,836.1

1,344.9

Jun-28-2023

7.500%

$850 Million 10% Senior Notes Due 2023

5,584.5

850.0

Apr-11-2023

10.000%

$1000 Million 11.5% Senior Notes Due 2023

6,570.0

1,000.0

Jan-22-2023

11.500%

$1450 Million 9.5% Senior Notes Due 2022

9,526.5

1,450.0

Apr-11-2022

9.500%

$2025 Million 8.25% Senior Notes Due 2022

13,304.3

2,025.0

Mar-23-2022

8.250%

$1473.2 Million 6.25% Senior Notes Due 2021

9,678.8

1,473.2

Jun-28-2021

6.250%

$200 Million 8.9% Senior Notes Due 2021

1,314.0

200.0

May-04-2021

8.900%

$590 Million 13.75% Senior Notes Due 2023

3,876.3

590.0

Nov-06-2023

13.750%

$2000 Million 12% Senior Notes Due 2023

13,140.0

2,000.0

Oct-24-2023

12.000%

$645 Million 13% Senior Notes Due 2022

4,237.7

645.0

Nov-06-2022

13.000%

$2000 Million 11.5% Senior Notes Due 2022

13,140.0

2,000.0

Oct-24-2022

11.500%

$600 Million 9% Senior Notes Due 2021 1

-

-

Mar-06-2021

9.000%

Total Offshore Bonds

137,375.9

20,909.6

8.1x

HKD 18000 Million 4.25% Convertible Bonds Due 2023 2

-

-

Feb-14-2023

4.250%

Total Convertible Bonds

-

-

8.1x

Total Debt

699,066.0

106,402.7

8.1x

Less: Cash and Equivalents

(163,278.0)

(24,852.1)

Plus: Restricted Cash

21,992.0

3,347.3

Net Debt

557,780.0

84,898.0

6.5x

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

85,852.0

13,067.3


Liquidity

Plus: Cash and Equivalents

163,278.0

24,852.1

Less: Restricted Cash

(21,992.0)

(3,347.3)

Total Liquidity

141,286.0

21,504.7

Credit Metrics

Gross Leverage

8.1x

Net Leverage

6.5x

Notes:
Sources: Reorg, company filing, HKEX; 2020 EBITDA calculated based on company filings
1. Repaid upon maturity
2. Early redeemed on February 10, 2021
Pro Forma: For Pro forma, the proceeds from the new bonds were added to cash as the exact use of proceeds for each of the bond raised remains unclear; The repayment for matured debts were subtracted from cash as the exact source of funding used to repay the debt remains unclear
US$ Translation: CNY/USD rate used for USD conversion is 6.57.


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