Evergrande seeks creditors’ support against liquidation petition – source


The China Evergrande logo is seen at the China Evergrande Center in Hong Kong, China December 7, 2021. REUTERS/Tyrone Siu

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HONG KONG, July 4 (Reuters) – China Evergrande Group (3333.HK) is asking its offshore creditors for support in fighting a lawsuit in a Hong Kong court to liquidate the troubled property developer, according to a person directly knowledge of the subject.

Evergrande, which is deemed to be in default on its nearly $23 billion offshore debt and is working on a debt restructuring plan, aims to submit creditor support as part of the evidence in court ahead of the first hearing on the winding-up petition on August 31, the person said.

Last week, Top Shine Global Ltd, an investor in the Evergrande Fangchebao unit, said it had filed for liquidation against the promoter because it had failed to honor a Top Shine share buyback agreement to Fangchebao. Read more

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The success of the petition could impact the promoter’s debt restructuring plan by diminishing the value of offshore assets that are central to the interests of offshore creditors.

The developer was not considering an out-of-court settlement with Top Shine at this time, the source said.

Evergrande declined to comment. Top Shine could not immediately be reached for comment.

The person declined to be named because deliberations on the company’s restructuring process are confidential.

The petition marks the first lawsuit of its kind against Evergrande, which has more than $300 billion in debt.

Evergrande, a former top-selling developer in China, said last week that Top Shine had filed for liquidation for a $110 million financial obligation, adding that it would “vigorously” oppose the petition.

He also said the lawsuit will not impact his offshore debt restructuring plan, which is expected to land by the end of July. Read more


Evergrande’s restructuring proposal is taking shape and the company aims to reach consensus with offshore creditors on specific restructuring terms by the end of this year, the person said.

While a liquidation or fire sale of Evergrande’s assets will result in very little recovery for creditors, the developer is proceeding with its asset disposal plan with the aim of setting aside that proceeds for restructuring purposes, said the person.

The sale of Evergrande’s Hong Kong headquarters could close in the coming months, the person said, after a potential $1.7 billion deal for the same collapsed at the end of the year. last year. Read more

The sale of undeveloped land in suburban Hong Kong is also still ongoing, the person added.

US asset manager Oaktree Capital Management, a lender to Evergrande to develop the land, sought to take control of the asset by appointing a receiver in February. Read more

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Reporting by Xie Yu and Clare Jim; Editing by Sumeet Chatterjee and Muralikumar Anantharaman

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