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China |  Evergrande gets extra time to try to avoid elimination

China | Evergrande gets extra time to try to avoid elimination

(HONG KONG) – A Hong Kong judiciary on Monday gave debt-laden Chinese real estate giant Evergrande until the end of January to submit restructuring plans and try to avoid liquidation, after a deadline initially set on Monday.

Hong Kong High Court Judge Linda Chan postponed the case until January 29, and said Evergrande’s lawyers should speak more directly “with the relevant authorities to confirm” that the restructuring proposal is feasible.

Evergrande, the largest importer in China, has fallen short of 2021 and has declared a share of more than 300 milliards of dollars, which is also a symbol of the rise of the immobilizer that will bring new years in China and facilitate an economic development. On a larger scale.

Last year, creditors filed a liquidation petition in Hong Kong against China Evergrande Group – which will begin the liquidation process – but the case dragged on as the two parties tried to negotiate an out-of-court settlement.

MI Chan said in October that Evergrande would be given a “final postponement” until Dec. 4 to draw up a concrete restructuring plan, or appoint independent liquidators from accounting firm KPMG.

In March, the real estate giant offered creditors the opportunity to replace their debts with new securities issued by the company and shares of two of its subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.

“Monetization” of subsidiaries

But negotiations stalled in September when the company’s president, Xu Jiayin, was subjected to “coercive measures” by Chinese authorities on suspicion of breaking the law.

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The same month, the company said it could not issue new bonds because its Chinese subsidiary, Hengda Real Estate Group, was under investigation.

At a court hearing in October, Evergrande’s lawyers said the restructuring would focus on “monetising” the two Hong Kong-listed subsidiaries. Evergrande estimated its debt at $328 billion at the end of June.

Once accounting for about a quarter of its GDP, China’s construction and real estate sector has been thriving for decades thanks to growing demand.

But the accumulated debts of major players were considered by Beijing to be an unacceptable risk to the Chinese financial system and to economic health in general.

Authorities have gradually restricted developers’ access to credit since 2020, and a wave of defaults has followed.

Hong Kong has a “common law” legal system, different from mainland China, which some foreign creditors prefer as a place to liquidate troubled Chinese manufacturers.

It remains unclear whether the liquidation order issued by a Hong Kong court can or will be implemented on the mainland.