Bond Investors Need to Liquidate China Evergrande Now

When it comes to collecting debt from distressed companies, a wait-and-see attitude will only end up with investors losing everything. That’s especially true with China’s real estate developers.

China Evergrande Group’s woes have been festering for more than a year. It was labeled a defaulter by international ratings agencies in December. Yet the developer still has not published a restructuring proposal. It has promised to release a preliminary plan by the end of July, but details will most likely be sparse.

The drawn-out restructuring process speaks to the complexity of the world’s most indebted developer, which has more than $300 billion in liabilities and $20 billion in dollar bonds alone. But it also underlines the false hope that foreign investors still hold.