Source: Gelonghui
Despite the sharp decline in the previous period, Evergrande is still unable to withstand a bit of “turbulence”.
Today,$EVERGRANDE (03333.HK)$A drop of more than 20%,$EVERG VEHICLE (00708.HK)$fell by more than 18%,$EVERG SERVICES (06666.HK)$It fell 2.5%. Currently, trading of the above three shares has been suspended.
According to news, today Evergrande ushered in a decisive moment of liquidation.
A winding-up order has been issued
Today, the Hong Kong court issued a winding-up order against China Evergrande. According to reports, if such a regulatory order comes into effect, it means that the court will oversee the liquidation process, which may include appointing a liquidator.
The issuance of this winding-up order may shake the already weak Chinese capital and real estate markets.
According to reports, even if Evergrande can file an appeal, it cannot stop the liquidation process, and it is currently impossible to predict how long the liquidation process will take.
Given the number of institutions involved, the liquidation process can be complicated, and there may also be political considerations. According to previous media estimates, the relevant process took 5 years or more.
In terms of impact, it is expected that there will be little impact on the company's business, including residential construction projects, in the short term, because an offshore liquidator appointed by creditors may take months or years to control a subsidiary in mainland China.
Multiple extensions
Evergrande is the most heavily indebted developer in the world, with a total debt of more than 300 billion US dollars. A debt default occurred in 2021, causing chaos in the troubled real estate industry.
As early as 2022, creditors applied to the Hong Kong court for the winding-up of Evergrande. The initial hearing was scheduled for August 31, 2022, and the subsequent winding-up hearing was adjourned seven times.
On December 4 of last year, the Hong Kong court approved Evergrande's application for an extension, further delaying the hearing of the winding-up petition until January 29, 2024.
Over the past two years, Evergrande has been working with a temporary bondholder group to develop a $23 billion debt restructuring plan.
However, at the end of September, Evergrande founder Xu Jiayin was investigated on suspicion of a crime, and the debt restructuring plan was aborted as a result.
Judging from the financial report, Evergrande's total debt is huge. Combined with the current downturn in the real estate cycle, it is very difficult to successfully liquidate the debt.
According to the data, as of June 30, 2023, China Evergrande's main revenue was about 128.18 billion yuan, with a total net loss of 39.25 billion yuan. Total assets are 1744 billion yuan, including current assets of 1578.5 billion yuan and total liabilities of 2388.2 billion yuan.
Editor/jayden