China Evergrande creditors are still none the wiser after the embattled property developer outlined the contours of a plan to restructure its offshore debt Friday. The one thing that seems certain is that they will likely need to eventually accept heavy losses.
Evergrande said it aims to have a more specific proposal by the end of this year—but there are scant details so far. The only useful information released: stakes in its property-services arm and electric-vehicle units will be used to back debts under its proposal. That is unsurprising given that the two assets are among those that Evergrande’s offshore investors have the clearest direct claim to. And they may still have some value. The two separately Hong Kong-listed companies had a combined market value of around $7.5 billion before trading in their shares was suspended in March.