Sources say Evergrande sold a yacht this year, as creditors increased their focus on offshore assets

The yacht ‘Event’, believed to be owned by China Evergrande, is docked in Hong Kong, China on October 11, 2021. Photo taken on October 11, 2021. REUTERS/Tyrone Siu/File Photo Obtaining licensing rights

SYDNEY, Sept 29 (Reuters) – China’s Evergrande Group (3333.HK) sold its superyacht for about $32 million earlier this year, trimming the developer’s overseas assets as its cash crunch deepens and it scrambles to assemble a new collection, two sources said. Debt renewal plan

Evergrande’s offshore bondholders are expected to increase their focus on offshore assets as the developer’s debt restructuring plan falters with the founder now investigated for suspected “illegal offences”.

The debt restructuring process became more complicated this week after Evergrande said it was unable to issue new debt due to an investigation into its main unit in China. Analysts said that the delay in debt restructuring increases the risk of the company’s liquidation.

Evergrande sold the 60-meter (197-foot) superyacht Event for 30 million euros ($32 million) as part of a non-core asset sale, the two sources familiar with the matter, who declined to be identified, said. Not public yet.

A third source familiar with the matter confirmed the sale of the yacht.

An Evergrande spokesman did not immediately respond to a Reuters request for comment.

With Evergrande founder and Chairman Hui Ka Yan now under investigation, analysts and investors are wondering who will run the company’s operations and what will happen to the external debt restructuring plan.

Evergrande is the world’s most indebted developer with liabilities totaling more than $300 billion. Its financial problems, which became public for the first time in 2021, have affected the Chinese economy as well as global markets.

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After defaulting on its dollar bonds in late 2021, Evergrande was in the process of seeking creditor approval for its $31.7 billion external debt restructuring proposals, which include bonds, guarantees and repurchase obligations.

Evergrande Event

Reuters reported on Tuesday that a major third-party creditor group from Evergrande plans to join a liquidation court petition filed against the developer if it does not submit a new debt rollover plan by the end of October.

Compared to its total foreign liabilities of $31.7 billion, Evergrande has significantly fewer assets outside China. The sale of the luxury yacht, Event, means that the company’s foreign creditors will have fewer options in any potential liquidation.

It happened She was delivered in 2013 and won the World Superyacht Award the following year, according to the website of her Dutch manufacturer Amels. Some Chinese media reports have estimated its value at $60 million in the past two years.

The event was registered in Evergrande’s name, meaning the proceeds would be returned to the developer, which has seen some of its own and the founder’s offshore assets stripped or seized by lenders due to loan defaults, sources said.

The sources said that a private Boeing Evergrande plane was sold in July last year for $100 million. Evergrande did not respond to a request for comment on the aircraft sale.

Reuters reported in 2021 that Evergrande had sold two Gulfstream jets, while the Wall Street Journal reported late that year that Evergrande had raised more than $50 million by selling two of its private jets to American aircraft investors.

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Lenders to Evergrande’s Hong Kong headquarters appointed a receiver in September last year to seize the building and put it up for sale. The property was valued at HK$8-9 billion ($1-1.15 billion) at the time.

Of the remaining external assets of the company and its founder, creditors will need to determine whether they have actually been used as collateral to raise money.

“The ability of foreign bondholders to access these assets (overseas) is a function of the legal claim – has (President Hui) pledged this?” One of the sources involved in the legal process told Evergrande.

($1 = 7.8274 Hong Kong dollars)

(Reporting by Scott Murdoch in Sydney; Additional reporting by Julie Chow in Hong Kong and Mark Jones in London; Reporting) Editing by Sumeet Chatterjee and Lincoln Feast.

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Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialized in financial journalism for most of his career and covers capital and debt markets across Asia and Australian mergers and acquisitions. He lives in Sydney.

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