Evergrande Group forced to liquidate assets in Hong Kong

On January 29, a court in the Hong Kong Special Administrative Region (China) ruled that real estate group China Evergrande must liquidate its assets to repay debts. The court will hold another hearing on the same day, which could lead to the appointment of a liquidator for Evergrande.

News about Evergrande Group is all over the media. Photo: FORBES

Court-appointed liquidators will manage the company and sell its assets to repay its debts. Once the process is complete, China's second-largest real estate company will cease to exist, according to CNN.

Immediately after the court's ruling, Evergrande's shares listed on the Hong Kong Stock Exchange plummeted and trading was halted at 10:18 a.m. on January 29 (local time) after falling 20%. Evergrande's subsidiaries, including Evergrande Property Services and Evergrande New Energy Vehicle Group, also called for a trading halt to prevent the free fall.

Evergrande has assets worth about $240 billion, but the group has debts of more than $300 billion. In 2021, Evergrande became the world's most indebted real estate company, and its default has become a typical case of the crisis in the Chinese real estate market, raising concerns about the contagion effect in the real estate sector at home and abroad.

In 2023, creditors filed a lawsuit against Evergrande in Hong Kong, a case that dragged on as the parties tried to reach a settlement and Evergrande prepared a debt restructuring plan. By the end of June 2023, Evergrande's debt was estimated to have reached $328 billion. The Shenzhen-based developer filed for bankruptcy in New York in 2023.

At the trial on the morning of January 29, Judge Linda Chan stated that Evergrande had failed to come up with a reasonable restructuring plan, despite the trial having been postponed for many months. Previously, in the trial in December 2023, the judge gave Evergrande two more months to come up with a plan to repay the debt to foreign investors.

CHI HANH

Source: https://www.sggp.org.vn/tap-doan-evergrande-bi-buoc-phai-thanh-ly-tai-san-tai-hong-kong-post724840.html