On February 28, Country Garden announced on the Hong Kong Stock Exchange that the company was informed of the winding-up petition filed by EverCredit Limited (the petitioner) with the High Court of the Hong Kong Special Administrative Region on February 27. The content relates to an unpaid term loan with an aggregate principal amount of approximately HK$1.6 billion and accrued interest between the Petitioner (the Lender) and the Company (the Borrower).
Previously, there was market news that Country Garden's creditors will apply for liquidation, and a Hong Kong bank will take over Country Garden's mortgaged assets in Hong Kong. But then the news was denied.
Country Garden: Strongly opposed.
Country Garden said in today's announcement that it would vigorously oppose the petition. In the absence of a High Court recognition order, a transfer of the Company's shares made on or after the Commencement Date will be null and void.
According to the announcement, the filing of the petition does not mean that the petitioner can successfully wind up Country Garden. As at the date of the announcement, no winding-up order had been made by the High Court to wind up the company. The High Court has fixed the first hearing date of the petition as 17 May 2024.
Country Garden said in response to an interview this morning that the aggressive actions of a single creditor will not have a significant impact on its delivery of buildings, normal operations and the overall restructuring of its overseas debts. The amount of the company's debts related to Kingboard Group accounts for a very low proportion of the overall interest-bearing liabilities overseas.
Effect of a winding-up petition.
The so-called winding-up petition refers to the winding-up petition filed by the creditors of the listed company with the court, and the court will conduct a winding-up petition hearing. If the petition is successful, a compulsory winding-up order will be made and provisional liquidators will be appointed to take over the company and dispose of the realisable assets.
In the second half of 2022 alone, more than 10 overseas entities of real estate companies, including Fantasia, Evergrande, Sinic Holdings, Dafa Real Estate, Xiangsheng Holdings, Fusheng International, and Zhongliang Holdings, received liquidation petitions from investors; Since then, it has been Sinic Holdings and Evergrande that everyone is very familiar with.
Some industry insiders explained that the winding-up order issued by the Hong Kong court has many constraints on the recovery of domestic assets because the assets of many real estate companies listed in Hong Kong are mainly in China. Therefore, some investment bankers also pointed out that the main purpose of the creditor's winding-up petition is to put pressure on the real estate company, so as to urge the real estate company to repay its debts in a timely manner, and the "deterrence" is of greater significance, and it is not really to liquidate the real estate company.
However, for real estate companies listed in Hong Kong, after being issued a winding-up order, after the disposal of realised assets, the completion of relevant investigations, and the amortization of debts, they may be dissolved and lose this listing platform.
Even if a compulsory liquidation is declared, it is a relatively long time from the winding-up petition to the declaration.
Nearly a year and a half have passed from the winding-up petition to January 29 this year, when the Hong Kong High Court officially issued a winding-up order for China Evergrande Group. Country Garden is in a similar situation, and this time will not be short.
Will Evergrande be liquidated?
Due to the current situation of the property market, companies are facing a lot of financial pressure. For Country Garden, it is estimated that the pressure is even greater, because Country Garden's focus has always been in fourth- and fifth-tier cities, and the most important assets for a real estate company are its own property and land bank.
There are not many high-turnover real estate companies with their own properties, while the value of land reserves and housing prices in fourth- and fifth-tier cities have been declining in recent years.
The house is difficult to sell, and the pressure to ensure the delivery of the building is huge, so Country Garden is naturally unable to repay the arrears. And when creditors see such a situation, can they not be anxious?
As Country Garden stated, "the amount of the company's debt related to Kingboard Group accounts for a very low proportion of the overall interest-bearing liabilities overseas. "Country Garden may also face compulsory winding-up if other foreign creditors also join the winding-up petition.
On the eve of the thunderstorm, the owner of Country Garden transferred 20% of the equity of Country Garden Property to the family trust**, and many people at that time questioned that Country Garden was transferring assets to leave a way out for themselves.
However, as long as Country Garden can basically complete the task of ensuring the delivery of the building, don't be a demon like Boss Xu, it is estimated that it will still give a chance to breathe.
When the Hong Kong High Court issued the Evergrande liquidation order, "a number of interviewed experts said that China Evergrande's liquidation should be treated fairly, ordinarily and gently, and that liquidation is the game of the market and the choice of institutions." At the same time, only by clearing out the risks caused by problematic enterprises with major hidden dangers and serious violations of laws and regulations can we leave a broader development space for law-abiding, compliant and healthy enterprises.
At the same time, experts stressed that at present, the progress of Evergrande's guaranteed delivery project is generally stable, and the delivery volume of Evergrande housing is close to 80%, and at the same time, the direct impact of liquidation on the rights and interests of domestic bondholders is also limited. ”
Write at the end. For Country Garden, being petitioned for liquidation shows that the pressure on its operations is increasing.
However, with the continuous introduction of new policies for the property market, real estate companies have also ushered in a better period of development, and whether Country Garden can seize the opportunity and better complete the task of ensuring the delivery of the building is the key to determining its future.
Material, **in the news** network.