“It’s time for the court to say enough is enough.” It is with these words that Linda Chana judge in a Hong Kong court, ordered the liquidation of the Chinese giant Evergrande, which in all these months has failed to present a convincing debt restructuring plan for its international creditors. A move that could inevitably cause new repercussions in China, both on a social level and in the financial markets and real estate sector.
Evergrande in liquidation
- This morning a Hong Kong court ordered the liquidation of Chinese real estate giant Evergrande, which failed to present a convincing debt restructuring plan for its international creditors.
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“It’s time for the court to say enough,” Judge Linda Chan said during the session. Subsequently, you appointed the company Alvarez & Marsal to follow the liquidation process, as highlighted Reuters. “Our priority is to maintain, restructure and keep as much of the company operational as possible. We will pursue a structured approach to preserve and return value to creditors and other stakeholders,” said Tiffany Wong, managing director of Alvarez & Marsal.
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Judge Chan said the appointment of a liquidator was in the interests of all creditors because he could take charge of a new restructuring plan for Evergrande at a time when its chairman, Hui Ka Yan, has come under investigation.
- Evergrande had been working for nearly two years on a $23 billion debt rollover plan with a group of creditors, known as the ad hoc bondholder group.
READ ALSO: “Because the Evergrande crisis will not be the new Lehman Brothers, but will tell where China is going”
Evergrande’s debts
Listed on the stock exchange in 2009, the company defaulted in 2021 with more than $300 billion in debt
“No fear for houses under construction”
Evergrande CEO Siu Shawn told Chinese media that despite the liquidation order, the company will ensure the normal progress of its new home construction projects. As, the ruling would not affect the operations of Evergrande’s onshore and offshore units. “We will proactively communicate with the liquidator, cooperate in accordance with the law in fulfilling relevant procedures, and follow international practices and market rules to promote debt settlement work and other key tasks, including ensuring the delivery of property,” he added.
The failed attempt at another postponement
Before the hearing, Evergrande had requested another postponement. His lawyer, in fact, had stated that he had made “some progress” on the restructuring proposal. Second Reuters, the company had proposed that creditors swap their debts for all the shares the company holds in its two Hong Kong units, up from holdings of around 30% in the subsidiaries before the latest hearing in December.
Reactions on the stock market
Trading in Evergrande shares was suspended after the stock plunged 21%.
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