2023-10-29 22:42:49
The fate of China Evergrande Group will be tested on Monday when Hong Kong’s High Court hears an application to put the ailing property developer into liquidation, almost two years following it defaulted on its obligations.
Evergrande had been working on a proposal to restructure its offshore debt for more than a year and a half, but its plans were thrown into doubt last month when billionaire founder Hui Ka Yan confirmed it was facing a investigation for suspected criminal activities.
The judge might order the company to be liquidated or adjourn the case to obtain new information.
A liquidation of Evergrande, whose total assets stood at $240 billion at the end of June, would send a new shock wave through already fragile financial markets, but is expected to have little immediate impact on the company’s activities, particularly on its numerous housing construction projects.
Evergrande did not respond to requests for comment.
The world’s most indebted real estate developer, with total liabilities of more than $300 billion, Evergrande defaulted on its offshore debt in late 2021 and became the poster child for a debt crisis that has since swallowed up the Chinese real estate sector.
Evergrande revealed that the investigation into
its founder
and one of its main subsidiaries last month, and mainland regulators barred it from issuing new dollar bonds, a crucial part of the restructuring plan. It also canceled creditor votes originally scheduled for late last month.
Top Shine, an investor in Fangchebao, a subsidiary of Evergrande, filed for liquidation in June 2022 because it believed Evergrande had failed to honor an agreement to repurchase the shares the investor had purchased in the subsidiary.
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