Evergrande, formerly China's best-selling developer, is currently the focus of that nation's crisis in the real estate market. Following late-year missed payments, its $22.7 billion in offshore debt-which consists of loans and private bonds-is now considered to be in default.

The most indebted Chinese developers, notably Evergrande, often have few foreign assets that can be utilized in offshore debt restructuring. Evergrande would be the first Chinese developer to use those assets to increase the investment recovery prospects of such creditors if the intention to employ onshore assets materializes and is approved by offshore bondholders.

According to the company's attorneys, the troubled real estate developer China Evergrande Group hopes to secure creditors' approval for its proposed debt restructuring by the end of February.

Evergrande, which has $300 billion in total liabilities, started one of China's largest debt restructuring operations this year due to a lack of new funding sources and sluggish real estate sales.

A Hong Kong court postponed a winding-up action against the developer until March 20, 2023 after hearing from Evergrande's lawyers that the developer plans to finalize its debt restructuring proposals by the end of February or the beginning of March.

Evergrande said in a lightly worded restructuring update it provided in July that it will provide asset packages to offshore creditors that would include shares in two Hong Kong-listed units as a sweetener. It said it expected due diligence work on the group to be finished soon after the update, and hoped to disclose a precise restructuring strategy before year-end. The idea was to put out a proposal that would be accepted by significant creditors. Currently, Evergrande and the bondholders are attempting to identify which onshore assets might be made available for credit enhancement.

An investor in Fangchebao (FCB), a subsidiary of Evergrande, filed a winding-up petition in Hong Kong in June because the developer had broken a promise to buy back the shares the investor had purchased in FCB.

The winding-up petition has been disputed by Evergrande and its main offshore credit group, who claim that the developer is aggressively pursuing the offshore debt restructuring work in the best interests of all creditors.

On November 6, China Evergrande Group announced that its interests in a residential development plot of undeveloped property in Hong Kong's Yuen Long area had been sold for $636.94 million by its receivers. The funds will be used to pay off some of the company's project-related debt, and the Chinese real estate developer predicted that the project will result in a loss of around $770 million in a filing to the Hong Kong stock exchange.