Evergrande's liquidation is ordered by Hong Kong court
HONG KONG -- A Hong Kong court on Monday ordered the liquidation of China Evergrande Group, the heavily indebted developer at the heart of the property crisis in Asia's biggest economy.
After Evergrande failed over the weekend to reach a deal to restructure $300 billion in liabilities, Justice Linda Chan granted a winding-up petition filed by offshore creditors more than a year ago.
Citing an "obvious lack of progress" and "the insolvency of the company," Chan told a packed courtroom, "I consider that it is appropriate for the court to make a winding-up order against the company, and I so order a winding-up order."
Under Chan's order, liquidators will be appointed to take control of the developer and sell its assets. The winding-up will occur as the Chinese property sector struggles to recover after the pandemic.
The move will also provide a test case for a 2021 arrangement on cross-border insolvency procedures that enables Hong Kong decisions to be recognized in mainland courts.
Evergrande shares dropped by over 20% in morning trading in Hong Kong.
Top Shine Global, an offshore creditor that filed the winding-up petition against China Evergrande Group in June 2022, declined to comment.
Evergrande also filed for bankruptcy protection in New York last August, seeking to protect its U.S. assets from creditors in offshore restructuring.
Chan said in a December hearing that the court would have to issue a winding-up order if the Chinese property developer did not provide a "concrete" restructuring plan.
Lawyers for the company had argued that the detention of its founder, Xu Jiayin, also known as Hui Ka-yan, had delayed its efforts to come up with a proposal.
Evergrande also faces court cases from one of its onshore creditors. Evergrande Property Services Group, the developer's own subsidiary, said it had started legal proceedings against a slew of firms, including Evergrande itself, to recover 11.4 billion yuan of deposit certificate pledge guarantees, according to a filing on Friday night on the Hong Kong bourse.
Hengda Real Estate Group -- Evergrande's core onshore subsidiary -- faces 2,053 cases involving more than 30 million yuan each, totaling 490.06 billion yuan. It had unpaid debts of 316.39 billion yuan ($44.58 billion) plus overdue commercial bills of 205.53 billion yuan as of the end of November, according to Evergrande's filing at the end of December.
On Jan. 25, Evergrande announced it had entered an agreement to sell part of a development subsidiary company in the southeastern city of Shantou in a deal worth 304 million yuan, according to a filing on the Hong Kong Exchange.
https://asia.nikkei.com/Business/Market ... Kong-court
Bringing the news. You stay classy, nas, Cambodia.