Just now, China Evergrande was issued a winding-up order by the Hong Kong High Court! Negotiations with major creditors broke down and Evergrande failed to agree on a restructuring plan. Creditors support the winding-up at the hearing. Today, China Evergrande fell more than 20%, Evergrande Auto fell more than 18%, and Evergrande Property fell 25%。At present, the above three shares have been suspended.
Just now, China Evergrande was issued a winding-up order by the Hong Kong High Court!
Negotiations with major creditors broke down and Evergrande failed to agree on a restructuring plan. Creditors support the winding-up at the hearing.
Today, China Evergrande fell more than 20%, Evergrande Auto fell more than 18%, and Evergrande Property fell 25%。At present, the above three shares have been suspended.
Evergrande's seventh postponement of the winding-up petition was scheduled for 9:30 a.m. on January 29, when the High Court of Hong Kong held a hearing on the winding-up petition against China Evergrande Group.
Meanwhile, the Hon Justice Ching-fan Chan of the High Court of Hong Kong will hold a hearing on a potential regulatory order at 2:30 p.m. on the same day. It is understood that such a regulatory order means that the court will oversee the winding-up process, which may include the appointment of liquidators.
Eventually, the High Court of Hong Kong issued Evergrande's execution: bankruptcy and liquidation.
This also means that Evergrande has become the first real estate company to declare "bankruptcy", and the scale of debt is unmatched.
Bankruptcy liquidation is a major blow to Evergrande's related parties.
It is reported that even if Evergrande can file an appeal, it cannot stop the liquidation process, and it is not possible to predict how long the liquidation process will take for the time being.
Given the large number of institutions involved, the liquidation process can be complex. **The process was previously estimated to take 5 years or more.
China Evergrande's financial and debt situation has long been in the spotlight.
According to the data, as of June 30, 2023, China Evergrande's main revenue was about 1281800 million yuan, with a total net loss of 392$500 million. The total assets are 1,744 billion yuan, of which current assets are 1,578.5 billion yuan and total liabilities are 2,388.2 billion yuan.
The debt is mainly divided into three parts, with banks, businessmen and owners accounting for one-third each, which is about 800 billion each.
After Evergrande is liquidated, how will these liabilities be repaid?
According to the process of China's bankruptcy liquidation law, the order of repayment is to pay off the arrears of employee wages and labor insurance expenses first;
The second is the tax arrears of bankrupt enterprises;
Finally, there is the bankruptcy creditor, that is, the creditor of Evergrande.
That is to say, first of all, if Evergrande is liquidated, Evergrande is now this 1A significant portion of the $74 trillion in assets will be sold at a low price**. This also means that Evergrande's net debt will exceed 700 billion yuan by then, and one of the three major creditors, banks, businessmen and owners, will be destined to not get back the money.
According to the order of debt repayment, the first echelon is employee wages, social insurance, housing provident fund, and so on. The second echelon is the various taxes that the company should pay and so on. The third tier is the debts of those creditors who need to be repaid.
In the third echelon, the first is the advance payment of home buyers, followed by the advance payment of ** businessmen, then the debts guaranteed by Evergrande for other companies, and finally the money of major financial institutions and banks, and overseas debts are ranked behind them. After all this is arranged, it will be the turn of shareholders and investment institutions.
From this sequence, it can be seen that there is no problem in repaying the advance payment of home buyers with Evergrande's current total assets. In other words, even if Evergrande is liquidated, the unfinished building can be delivered normally. Then there is basically no problem in repaying the advance payment of the ** merchant. However, after repaying these two payments, Evergrande's total assets have basically been repaid. Then the rest is Evergrande's 700 billion hole.
This also means that the money lent to Evergrande by major banks, as well as the money lent to Evergrande by overseas institutions, as well as those of us who bought Evergrande**, are likely to not be able to get this money back.