SYDNEY (Reuters) – A large group of China Evergrande Group’s offshore creditors plans to join a liquidation petition filed against the developer if it does not submit a new debt restructuring plan by next month, said two sources close to the matter.

The group of creditors owns a large part of Evergrande’s offshore bonds, which will give more weight to the liquidation petition filed against the developer by an investor in a Hong Kong court if that group decides to join the request .

The implementation of Evergrande’s offshore debt restructuring plan, unveiled in March, has been uncertain since the developer said on Sunday it was unable to issue new bonds due to an ongoing regulatory investigation in China.

Evergrande is seeking approval from its creditors for its plan to restructure its offshore debt worth $31.7 billion (29.97 billion euros).

As part of this plan, Evergrande is offering various options to foreign creditors, including exchanging part of their debts for new bonds with a maturity of 10 to 12 years.

A group of Evergrande bondholders were surprised by the company’s weekend announcement that it was unable to issue new bonds, and sought to meet with the developer for more information, both sources said.

If Evergrande does not present a new restructuring plan by Oct. 30, this group of bondholders will support a liquidation petition already filed against the developer, the sources said.

The group was in favor of restructuring Evergrande’s debt, but the promoter’s announcement this weekend dampened hopes of achieving this, the sources added.

Top Shine Global, an investor in Evergrande’s Fangchebao division, filed for liquidation in Hong Kong in June 2022, saying the developer had failed to comply with an agreement to repurchase shares it held.

In July, the hearing regarding this liquidation application was adjourned until October 30, in order to await the results of the vote on the debt restructuring plan.

Evergrande must obtain approval from more than 75% of holders in each category of debt for the plan to be approved. This meeting is scheduled for mid-October.

Evergrande did not immediately respond to a request for comment.

(Reporting by Scott Murdoch, with contributions from Donny Kwok in Hong Kong, Corentin Chappron, editing by Kate Entringer)

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