With more than US$300 billion in debt, Evergrande has been at the center of China's property quagmire since last year as the company struggled to repay suppliers, creditors and investors in wealth management products after Beijing launched measures to control developers' high debt levels.

The liquidity squeeze at Evergrande, whose entire $22.7 billion worth of offshore debt including loans and private bonds is deemed to be in default, subsequently engulfed other Chinese developers as their credit conditions deteriorated, and drove several smaller firms to defaults.

Evergrande's eagerly anticipated offshore-debt restructuring plan, which China's formerly top-selling developer has said it will announce by end-July, is expected to serve as a template for its cash-starved peers.

"We're all waiting for Evergrande's proposal to get an idea of the terms and it'll set a benchmark," said a senior executive of a property developer who has done dollar-bond swaps and is currently in talks with advisers on a restructuring.

"No firms would want to be the first because that'd be tremendous pressure."

The restructuring proposal, though, will come at a time when China's macroeconomic conditions have deteriorated and the property sector is witnessing unprecedented challenges.

The world's second-biggest economy, of which the property sector accounts for a quarter, only narrowly missed a contraction in the second quarter.

Moreover, Beijing is scrambling to reassure homebuyers who are threatening to stop paying mortgages on unfinished housing projects, in rare protests that ars set to spur a shakeout among developers.

Some offshore creditors of Evergrande told Reuters that there was still disagreement on how it should repay and reorganize the debt, which could result in a delay in implementing the restructuring.

But the developer's newly appointed chief executive officer Siu Shawn told the 21st Century Business Herald late on Friday that the firm had reached basic consensus with several major offshore creditors on the principles and framework of the restructuring proposal.

Evergrande declined to comment.

Debt obligations

Investors will also be closely watching the role the state will play in the restructuring proposal.

Evergrande began talks with its offshore creditors about a restructuring proposal earlier this year, after advisers for a group of dollar bondholders demanded more transparency from the developer.

Reuters reported in May, citing sources, that Evergrande was considering repaying offshore public bondholders owed around $19 billion with cash instalments and equity in two of its Hong Kong-listed units.

After unveiling the restructuring proposal, the firm aimed to reach consensus with its creditors on specific terms by the end of this year, a separate source told Reuters earlier this month.

In mainland China, Evergrande has been extending its debt repayment obligations, though creditors are growing impatient.

The developer's latest repayment extension proposal on a 4.5-billion-yuan ($666.7 million) bond was voted down this month, while small suppliers, who are owed money, are also threatening to stop paying bank loans.

Evergrande also aimed to release a simple restructuring plan for its onshore debt as early as this week, financial information provider REDD reported on Friday.

Raymond Cheng, head of China and Hong Kong research at CGS-CIMB Securities, said Evergrande's proposal should also outline what it will do with its unsold projects and existing land bank, which would have a direct impact on the broader property market.

"Investors will not look at Evergrande's proposal solely from a company perspective, but also a macro perspective," said Cheng.

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