This Monday, the Chinese real estate giant Evergrande got the Hong Kong Justice Department to authorize a seventh postponement of the hearing on the liquidation petition that a foreign creditor filed against the indebted company a year and a half ago. Everything indicated that the one he achieved in October would be the last, but now the hearing will be held on January 29, 2024. This was indicated by Judge Linda Chan, reports the newspaper South China Morning Post and reports Efe.
The judge had already given the real estate giant until this Monday to have a restructuring agreement ready and warned that, if the conglomerate did not complete the aforementioned plan, it was “highly probable” that she would order its liquidation. At that time he had assured that this possible last postponement would serve for Evergrande to offer a more satisfactory option for creditors compared to what they would recover in the event of liquidation, and pointed out that the company had lost too much time in its negotiations throughout the year. last year and a half.
Top Shine Global Limited – a company registered in Samoa owned by local investor Lin Ho Man – filed this liquidation petition alleging that Evergrande had failed to fulfill its commitment to repurchase shares for the equivalent of approximately $110 million from one of its subsidiaries.
As reported in the international press, a few weeks ago Evergrande would have offered an exchange of creditors’ debts for 30% stakes in its two subsidiaries listed in Hong Kong – dedicated to real estate management and electric vehicles – and 17.8 %. of the matrix itself.
However, a group of bondholders that would own more than a third of Evergrande’s offshore debt have presented a counteroffer in which they claim majority stakes in the three companies; At the moment it is unknown what the conglomerate’s position is regarding this proposal. Furthermore, analysts cited by Bloomberg had raised the question of whether a hypothetical liquidation ordered by Hong Kong Justice would be recognized in mainland China.
A crisis that lasts over time
Evergrande, the real estate giant, accumulates a liability of almost 330,000 million dollars, went into default two years ago after suffering a liquidity crisis due to the restrictions imposed by Beijing on the financing of developers with a high level of leverage, after which was intervened by the Chinese authorities. Since that moment, what was once China’s largest real estate developer has been trying to get rid of assets by raising as much money as possible while preparing a plan to restructure its debt.
Regarding the ‘offshore’ debt, of which Evergrande accumulates almost $20 billion unpaid, the company has not achieved the support of an important segment of creditors, and has already suspended voting on its proposal on several occasions. restructuring.
The constructions that Evergrande is missing
It is estimated that Evergrande has yet to finish building and delivering homes sold off plan worth about 604,000 million yuan (85,407 million dollars, 78,498 million euros), this being one of the non-financial factors that most worries the Chinese Government. . due to its possible implications for social stability, since real estate is one of the main investment vehicles for families in the country.
When was the last postponement?
The last of these postponements occurred at the end of September, when it acknowledged that its sales were evolving worse than expected and announced that it cannot issue new debt through its main subsidiary in China. The group has been plunged into a new crisis after its founder and president, Xu Jiayin, was placed under a form of house arrest for “suspicions of illegal activities.”