A creditor files liquidation petition against Evergrande in Hong Kong

A creditor files liquidation petition against Evergrande in Hong Kong

A foreign creditor filed a petition for liquidation against the indebted Chinese real estate giant Evergrande before the Hong Kong Justice.

In a statement to the Hong Kong Stock Exchange, on which it is listed, Evergrande revealed that the whistleblower is Top Shine Global Limited, a Samoan-registered company owned by local investor Lin Ho Man.

The company indicated that the liquidation request is related to a “financial obligation” amounting to 862.5 million Hong Kong dollars (109.9 million dollars, 103.9 million euros), without offering more details in this regard. .

Evergrande assured that “it will vigorously oppose” the aforementioned lawsuit, and that it hopes that it will not have any impact on its restructuring plans or the times it manages to present them, keeping its deadline at the end of July.

In that same statement, as in those it has issued in recent weeks, the conglomerate confirmed that its shares will continue to be frozen after its listing was suspended on March 21, one day before recognizing that it was not going to be able to present its income statement for the year 2021 due to the “large number of audit processes” it faced.

The Hong Kong Judiciary indicated on its website that the trial between Top Shine Global Limited and Evergrande will be held on August 31.

Although Hong Kong belongs to China as a semi-autonomous region after the end of the British colonial era 25 years ago, the local judiciary operates independently from that of the country’s mainland.

Evergrande made headlines after the summer of 2021, when it accumulated liabilities of more than 300,000 million dollars added to a liquidity crisis that caused it to incur, in the eyes of rating agencies such as Fitch, in the default of some of its ‘offshore’ bonds. ‘.

The financial position of many Chinese real estate companies worsened after, in August 2020, Beijing announced restrictions on access to bank financing for developers who, like Evergrande, had accumulated a high level of debt, supporting their growth for years on aggressive leverage policies.

Chinese authorities have already intervened in the company, which announced in January that it would submit the aforementioned “preliminary restructuring proposal” to its creditors within the next six months.

Samuel Edwards
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