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Massive Evergrande Restructuring Plan Could Be Biggest in Chinese History: Report

Shares of the stock dropped Monday in Hong Kong as the company, which has reported over $300 billion in liabilities, inches closer to a default.
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China's Evergrande Group real estate company is planning to include all of its offshore public bonds and private debt obligations in a restructuring.  

Shares of the stock dropped Monday in Hong Kong as the company, which has reported over $300 billion in liabilities, inches closer to a default, which would be the largest in China's history. 

The company's plan would cover public bonds sold by Evergrande and its business unit Scenery Journey and would include about $260 million of notes issued by joint venture Jumbo Fortune Enterprises that Evergrande has guaranteed, Bloomberg cited sources as saying Monday. 

Last week, the company said that it has received a demand from creditors to pay about $260 million. It is already late in paying $82.5 million in coupons due on Nov. 6. 

"In light of the current liquidity status ... there is no guarantee that the group will have sufficient funds to continue to perform its financial obligations," Evergrande said last week. 

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The Chinese government has said that it would send a working group Evergrande to oversee risk management, strengthen internal controls and maintain normal operations, at the request of the company, CNN reported. 

In its filing, Evergrande said intended to actively engage with creditors to come up with a "viable restructuring plan" to deal with its offshore debts. 

The grace periods for interest payments on two notes from Scenery Journey unit were scheduled to end Monday, potentially marking the developer's first default on public debts. 

Evergrande's restructuring could have big implications around the world and all eyes are on China to see whether the country can coordinate a restructuring without disrupting the global real estate sector, which accounts for nearly a quarter of economic output globally, according to Bloomberg.