The conclusion of the liquidation petition hearing of Evergrande Group may be announced next Monday, January 29.
On January 26, according to the website of the Hong Kong Judiciary, the Hong Kong High Court will hold a hearing at 9:30 on January 29, 2024A hearing on a potential regulatory order will be held next Monday at 2.30pm.
It is understood that such a regulatory order, if effective, would mean that the court would oversee the liquidation process, which could include the appointment of a liquidator.
Previously, on December 4, 2023, it was announced that the Hong Kong High Court had granted the company’s application for adjournment, further adjourning the hearing of the petition to January 29, 2024, which was the seventh time it had issued a winding-up petition hearing adjournment.
The hearing is final
On January 26, according to the website of the Hong Kong Judiciary, the Hong Kong High Court will hold a hearing of the winding-up petition against the group at 9:30 on January 29, 2024. Meanwhile, Judge Chan Ching-fen will hold a hearing on a potential regulatory order at 2:30 pm next Monday.
Huang Lichong, President of Huisheng International Capital Co., Ltd., acceptsChinese reporters said in an interview that Evergrande will face a life-and-death moment before 2024. According to the general judicial procedure, if Evergrande cannot come up with a plan that can be accepted by the court and creditors this time, it may face the fate of bankruptcy this time.
"Now is the time for creditors to apply for the liquidation of Evergrande for a hearing, and the fact that Evergrande owes debts is certain. Therefore, the only reason Evergrande can avoid liquidation is that Evergrande can propose aThe plan can be accepted by the court and is willing to postpone the liquidation. Personally, I think that with Evergrande’s current situation, it may be difficult to come up with a convincing plan. "Huang Lichong said.
The hearing of the petition has been postponed several times
Looking back, China Evergrande onceThe Hong Kong High Court granted the company’s application for an extension on December 4, 2023, further adjourning the hearing of the winding-up petition to January 29, 2024, providing China Evergrande with a temporary respite.
In fact, in June 2022, creditors filed a winding-up petition against Evergrande in the High Court of the Hong Kong Special Administrative Region of China, and GAIN Global filed a winding-up petition against Evergrande in the High Court of the Hong Kong Special Administrative Region on June 24, 2022. The amount of claims involved was about 862.50 million Hong Kong dollars. At that time, the hearing time was set for August 31, 2022. The subsequent winding-up hearing against Evergrande was postponed seven times until the final time was set.
Mr. Wong said that once the court is satisfied that one of the requirements set out in section 177 (1) of the Companies Winding-up Ordinance (including the company’s insolvency) has been met, it can issue a winding-up order against the company. The court will take into account the wishes of the creditors and the principles of justice and fairness. During the compulsory winding-up period, all proceedings against the company and actions by creditors will be automatically suspended unless the court approves the commencement or continuation of such proceedings. In addition, the powers of the directors will be suspended, while the court-supervised liquidator will be responsible for recovering and realising the company’s assets, investigating the company’s affairs, adjudicating creditors’ claims, and distributing to creditors from the winding-up estate. Once the company is wound up, the liquidator will apply to the court to release the liquidator from liability and dissolve the company.
Data show that as of June 30, 2023, China Evergrande’s main revenue was about 128.18 billion yuan, and the total net loss was 39.25 billion yuan. China Evergrande’s cash and cash equivalents were about 4.047 billion yuan. Total assets were 1.744 trillion yuan, of which current assets 1.5785 trillion yuan and total liabilities 2.3882 trillion yuan.
The latest move by China Evergrande is still in the debt reduction action. On January 25, China Evergrande disclosed a transaction.
The announcement shows that a subsidiary of China Evergrande, namely the transferor Hengda Real Estate Group Guangdong East Co., Ltd., and the transferee Shantou HengyaoThe Transferor transferred its 65% interest in the Project Company, Shantou Hengming Co., Ltd. to the Transferee at a total consideration of approximately RMB 137.60 million. After completion of the Disposal, Hengda will no longer hold any equity interest in the Project Company.
As part of the transaction, Shantou Hengming Co., Ltd., the project company, will forgive part of the debt of the transferor and its associates to it, which is approximately RMB 376 million yuan; and agrees that after the completion of the transaction, the RMB 200 million yuan debt owed by the transferor to the project company will be repaid without interest and liquidated damages on December 31, 2026.
China Evergrande expects to record a profit of approximately RMB 304 million on the sale. However, as the entire amount of the sale will be used to offset part of the debt of the transferor and its affiliates to the project company, China Evergrande will not receive any cash proceeds from the sale.