On the news side, the Hong Kong High Court officially issued an order requiring China Evergrande to liquidate and begin to enter the bankruptcy liquidation procedure of disposing of realised assets and repaying debts.
According to Evergrande's current debt situation, after the process is completed, Evergrande Group will most likely lose the listing platform of China Evergrande.
Evergrande has actually been on the verge of bankruptcy for the past two years, as early as June 2022, when a creditor (Evergrande owes him $100 million) filed a winding-up petition against Evergrande.
The so-called winding-up petition is a common means of debt collection in the Hong Kong legal system, and creditors will apply for winding-up when they see no hope.
For overseas creditors, Evergrande will not be allowed to go bankrupt and liquidated unless it is absolutely necessary.
This is because the overseas bond issuance of real estate enterprises usually takes the wholly-owned overseas subsidiary or special purpose vehicle as the issuer, but the underlying assets related to redemption are generally placed in the hands of the domestic subsidiary.
And now, ** and the bank are staring at the payment of various projects, and it is difficult for you to transfer money abroad. Therefore, the repayment order of offshore bonds is relatively low, and investors who hold offshore bonds of real estate enterprises have little to do about it.
Evergrande announced in March last year that if Evergrande goes bankrupt and liquidates, the creditors can only get a maximum of 934% of the principal, overseas can only get about 2% to 3%.
Therefore, the overseas creditors are actually more like Evergrande's restructuring plan can be passed, otherwise the winding-up petition will not be postponed seven times.
This time it was suddenly passed because Evergrande Real Estate and Xu Jiayin were investigated successively, so the restructuring plan that had barely reached a consensus could not be implemented, and Evergrande's hope of repaying the money was gone.
At the same time, there is also a creditor who owes $2 billion to enter the market this time, so the probability of the court's consent is increased.
Evergrande's bankruptcy has nothing to do with domestic buyers and creditors, the bankruptcy is a Hong Kong listed platform, which is an overseas entity, while most of Evergrande's major major assets are still in China, and overseas creditors have no right to deal with them.