Hong Kong High Court orders Chinese real estate giant Evergrande to be liquidated

Supreme Court Hong Kong ordered this Monday liquidation of Chinese real estate giant Evergrande after failing to submit a proposal to restructure its dutywhich increases to $328 billion (about 302 billion euros).

“The hearing lasted a year and a half, and the company has still not been able to present a concrete restructuring proposal. “I think it’s time for the court to say enough is enough,” Judge Linda Chan said during the hearing, according to the South China Morning Post.

This decision, which became the first liquidation order issued by the city court, can still be appealed, although on the same day the provisional liquidator will begin managing the enterprise. debt restructuring with creditors and take control of your assets, books and records.

The collapse of its shares on the Hong Kong Stock Exchange

After the announcement, Evergrande Group shares on the Hong Kong Stock Exchange fell by almost 21%Shares in Evergrande New Energy Vehicle fell 18% and shares in Evergrande Property Services Group Limited fell 2.5%, prompting the group to suspend trading of its shares.

This court ruling faces the challenge of being recognized by any of the competent courts in Mainland China, where the company more than 1200 projects at different stages and where liquidators will have limited enforcement powers without the support of one of the three courts.

Evergrande missed deadline for debt restructuring

The order arrived after expansion series to a hearing, which was granted precisely in order to be able to restructure his debt.

In June 2022, Samoa-based Top Shine Global decided to take the company to court, saying it had failed to fulfill its obligations to buy back shares that an investor had purchased in Fangchebao, a subsidiary of Evergrande.

financial difficulties The company’s situation worsened last September when Evergrande founder Hui Ka Yang was appointed under arrest as a suspect in various crimes, and the failure to carry out new debt issuances as a result of an investigation by one of its major subsidiaries, Hengda Real Estate.