Hong Kong Court Orders Liquidation of Evergrande
A Hong Kong court has mandated the liquidation of China Evergrande Group, following the company's inability to negotiate a restructuring of its over $300 billion debt.
Justice Linda Chan, acknowledging Evergrande's insolvency and lack of progress in negotiations, approved the creditors' year-old petition for a winding-up order. Consultancy firm Alvarez & Marsal was appointed as the official liquidator to oversee the next steps with Evergrande's management.
As part of the liquidation process, the firm aims to preserve and restructure as much of Evergrande's business as possible. This case emerges during the Chinese property market's struggle to recover post-pandemic and will test the 2021 cross-border insolvency framework between Hong Kong and mainland China.
Evergrande's shares and those of its affiliates, Evergrande Property Services Group and China Evergrande New Energy Vehicle Group, were suspended from trading after significant drops in value.
Evergrande, which has sought bankruptcy protection for its U.S. assets, did not comment, and creditor Top Shine Global, who originally petitioned for liquidation, remained silent post-ruling.
Fergus Saurin of Kirkland & Ellis, representing bondholders, criticized Evergrande's failure to engage in meaningful restructuring talks. Evergrande's restructuring efforts were reportedly hindered by the detention of its founder, Xu Jiayin.
Evergrande's onshore subsidiary, Hengda Real Estate Group, faces multiple lawsuits totaling over 490 billion yuan in liabilities, with significant unpaid debts and overdue bills. Additionally, Evergrande Property Services Group has initiated legal action to recover funds from Evergrande and other firms.
On January 25, Evergrande disclosed an agreement to sell part of a subsidiary for 304 million yuan, according to filings with the Hong Kong Exchange.
As part of the liquidation process, the firm aims to preserve and restructure as much of Evergrande's business as possible. This case emerges during the Chinese property market's struggle to recover post-pandemic and will test the 2021 cross-border insolvency framework between Hong Kong and mainland China.
Evergrande's shares and those of its affiliates, Evergrande Property Services Group and China Evergrande New Energy Vehicle Group, were suspended from trading after significant drops in value.
Evergrande, which has sought bankruptcy protection for its U.S. assets, did not comment, and creditor Top Shine Global, who originally petitioned for liquidation, remained silent post-ruling.
Fergus Saurin of Kirkland & Ellis, representing bondholders, criticized Evergrande's failure to engage in meaningful restructuring talks. Evergrande's restructuring efforts were reportedly hindered by the detention of its founder, Xu Jiayin.
Evergrande's onshore subsidiary, Hengda Real Estate Group, faces multiple lawsuits totaling over 490 billion yuan in liabilities, with significant unpaid debts and overdue bills. Additionally, Evergrande Property Services Group has initiated legal action to recover funds from Evergrande and other firms.
On January 25, Evergrande disclosed an agreement to sell part of a subsidiary for 304 million yuan, according to filings with the Hong Kong Exchange.