Evergrande says it may buy back dollar bonds to boost confidence

Beijing

CHINA Evergrande Group told investors it may buy back some of its dollar bonds to bolster market confidence, people familiar with the matter said.

The world's most indebted developer is also exploring ways to repay a HK$18 billion (S$3.15 billion) convertible bond due in February, and will consult investors on a solution, said the people, who attended an investor meeting with Evergrande officials organised by Bank of America on Friday.

The officials told attendees that options for the convertible bond include full repayment, a tender offer or an exchange offer.

Evergrande has come under intense investor scrutiny in recent weeks after fears of a cash crunch triggered a sell-off in the company's bonds and shares.

While few expect Evergrande to default any time soon, the developer is facing pressure to pare back its US$120 billion debt pile and increase cash reserves.

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In the meeting on Friday, Evergrande officials said the agreement signed late last month with strategic investors holding 86.3 billion yuan (S$17.5 billion) of shares does not include any put options.

The officials also said China's government may roll out measures to support some property developers either by the end of this month or early next month, allowing firms to swap short-term debt into long-dated obligations to keep the real estate market stable, said the attendees, who asked not to be identified because the meeting was private.

A Hong Kong-based Bank of America spokesperson declined to comment on whether the investor meeting took place. Officials at Evergrande did not immediately respond to a request for comment. BLOOMBERG