China Evergrande: Hong Kong court adjourns winding-up hearing by 5 weeks, signals last reprieve for developer to sort out its debt
The next hearing will be on December 4, giving the Guangzhou-based developer five weeks to get its house in order, Justice Linda Chan said in a decision today. The High Court judge also warned it is “highly likely” to grant a winding-up order then, if no restructuring plan was forthcoming by then.
Justice Chan said the adjournment would give more time for Evergrande to work out a deal that would offer greater returns to creditors than in the case of liquidation. She added that the developer had consumed too much time over the past 17 months on its negotiations with creditors.
Evergrande: the US$220 million bet, failed arbitration and the winding-up case
Evergrande: the US$220 million bet, failed arbitration and the winding-up case
The winding-up petition was filed in June 2022 by Top Shine Global Limited, an offshore entity which the troubled developer said was beneficially owned by businessman Lin Ho-man.
Top Shine and Lin’s other private vehicle Triumph Roc International took legal action to recover more than HK$1.72 billion (US$220.5 million) of investment in Fangchebao, Evergrande’s online property and auto platform in March 2021. The deal failed after the Chinese developer fell into financial distress that year.
Today’s hearing followed five adjournments since June 2022, while China Evergrande thrashed out a scheme to reorganise US$20 billion of debt with offshore creditors.
That restructuring scheme unravelled last month, after home sales underwhelmed its founder and chairman Hui Ka-yan was detained for unspecified crimes and the developer said troubles at its onshore unit Hengda Real Estate crippled its ability to issue new bonds to offshore creditors as part of the restructuring.
