Last week, Evergrande failed to release the debt restructuring proposal of its 300 billion dollars. The move causes ongoing uncertainty over the destiny of China’s once real estate champion.

The struggling property developer suffered the most noticeable default last year, hit by the liquidity crisis in the property market. The default shook the entire China’s real estate market. In January, the company said it would release a “preliminary restructuring proposal” by the end of July.

On Friday, the troubled real estate developer announced that its contracted apartment sales in the first half of the year had dropped about 97% from a year earlier.

The company did not provide comprehensive details on how it would restructure its over 300 billion dollars in liabilities. Offshore bondholders keep about 20 billion of the figure. 

A source close to the offshore bondholders told the Financial Times that Evergrande was “nowhere near” a concrete debt restructuring plan.

Evergrande reportedly hopes to reach an agreement in principle with major creditors ahead of the 20th National Congress of the Chinese Communist Party later this year.

Evergrande is the world’s most indebted firm, with about 300 billion dollars in outstanding debts. Since the debt crisis, the company has struggled to fulfill its financial obligations to creditors, customers, and suppliers.

Less than two weeks ago, the company just fired its CEO and CFO for their involvement in an arrangement that led banks to seize two billion dollars from its key subsidiary.

Real estate has long been the backbone of China’s economy, accounting for a quarter of the country’s gross domestic products. July data for its crippled real estate market is gloomy again, following a nationwide mortgage boycott movement that destroyed home buying confidence. 

The Wall Street Journal on July 31 cited data from CRIC, a Chinese real-estate data provider, reporting that sales of China’s top 100 real estate developers dropped nearly 40% in July to 77.6 billion dollars compared to the prior year.

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