Evergrande has done its best in response to the winding up order, which is a pity! Xu Jiayin s fate

Evergrande has done its best in response to the winding-up order, which is a pity! Xu Jiayin's fate is embarrassing

According to CCTV News, as of January 29, the liquidation of China Evergrande has once again attracted attention in the Hong Kong High Court.

According to the ** Times, under the legal framework of Hong Kong, applying for winding-up has become a common means of debt recovery.

The court issues a winding-up order, which formally commences the bankruptcy liquidation proceedings of the company. This announced that the Hong Kong capital market ushered in the largest bankruptcy and liquidation of real estate companies.

Previously, China Evergrande was faced with a winding-up application from creditors, and in order to postpone the liquidation process, it has repeatedly expressed its willingness to introduce a new debt restructuring plan.

However, due to the slow progress of the debt restructuring plan, the court eventually ordered the liquidation of Evergrande. Evergrande's liabilities are as high as 24 trillion yuan, the liquidation incident has attracted widespread attention.

In fact, the news that China Evergrande is about to receive a winding-up order has long been spread, and the situation is extremely tense.

According to information disclosed on the official website of the Hong Kong Judiciary, a high-profile court hearing will be held on the afternoon of January 29, presided over by Judge Chan Ching-fan.

Subsequently, China Evergrande, Evergrande Automobile, and Evergrande Property on Hong Kong** successively announced the suspension of trading on the same day, and the share price of China Evergrande fell sharply by more than 20% before the suspension, and the share price of Evergrande Automobile also fell by more than 18%.

This series of changes has a far-reaching impact on Evergrande Group, especially in terms of domestic business, especially whether the follow-up work can be carried out smoothly.

According to the latest news in January 2024, the 21st Century Business Herald disclosed the overseas liquidation problems faced by China Evergrande.

At this critical juncture, Sean, executive director and chief executive officer of China Evergrande and executive president of Evergrande Group, responded to the matter, saying that the group and China Evergrande have done their best to defend themselves.

He pointed out that before this, the group had been supporting and urging China Evergrande and its advisory team to conduct comprehensive and in-depth exchanges with various creditors.

Sean stressed that the group has always proceeded from the actual situation of the company and strived to protect the best interests of domestic and foreign creditors on the basis of maximum fairness.

Sean said that although we have been working tirelessly to restore and enhance the value of our assets and the vitality of our business, in reality, the group is facing huge operational difficulties and resources are quite limited.

The Company also believes that it is difficult to meet the relevant statutory conditions for the key aspects of offshore debt restructuring. These circumstances have led to heightened uncertainties, which ultimately make it difficult to successfully implement a debt restructuring plan.

We can only express our deep regret that the outcome of today's decision of the Court, contrary to our initial expectations, has been exhausted.

Next, as the management of the group, we will bravely face the current difficulties and problems, and will respond to these challenges by all legal and compliant means.

Sean clearly pointed out that the subject of the current overseas winding-up order issued by the court is China Evergrande (03333.).HK), which is listed in Hong Kong.

The management and operation system of Evergrande Group and its domestic and foreign subsidiaries as independent legal entities remains unchanged at present.

The Group will continue to strive to do everything possible to ensure the stability of its business and operations in China, while steadily advancing key tasks such as ensuring the delivery of properties to maintain the quality of property services from any impact.

At the same time, we will make every effort to ensure the smooth progress of risk mitigation and asset disposal, and continue to promote all work in accordance with the law and fairly.

A senior lawyer with extensive legal experience told the National Business Daily that as far as the current situation is concerned, the liquidation of China Evergrande Group will not immediately have a direct negative impact on its domestic subsidiary.

Especially for Evergrande Real Estate, which has attracted much attention, although China Evergrande Group has fallen into bankruptcy and liquidation, it will not directly lead to the bankruptcy of Evergrande Real Estate.

On the contrary, the most likely scenario is that the equity interest in Evergrande Real Estate held by China Evergrande Group may be affected by the disposal to some extent throughout the bankruptcy liquidation process.

In addition, domestic home buyers enjoy a statutory "super priority" under the framework of relevant regulations.

As of April 20 last year, the relevant departments issued the Reply of the Supreme People's Court on the Protection of the Rights of Consumers of Commodity Housing (Fa Shi [2023] No. 1) (hereinafter referred to as the "Reply"), which clearly stipulates that if a consumer of commercial housing purchases for the purpose of residence and has paid the full price, his right to claim for the delivery of the house shall have priority over the priority right to be repaid for the construction project price, mortgage rights and other creditor's rights, and this claim should be supported by the relevant departments.

At the same time, the Reply also specifies that if the house cannot be delivered and there is no possibility of actual delivery, the right of commercial housing consumers to claim for refund of the price should also take precedence over the priority right to repayment of the construction project price, mortgage rights and other creditor's rights, and the relevant departments should also support it.

However, it is not an easy task to successfully advance this complex and daunting task. So far, China Evergrande's winding-up hearing has been adjourned seven times, making the whole situation even more complex and uncertain.

Previously, the High Court of Hong Kong had decided to set 4 December 2023 as the final adjournment of the liquidation hearing of China Evergrande.

However, what is surprising is that at the court hearing on the same day, the party applying for winding-up suddenly announced that it would not ask the court to grant a winding-up order, and at the same time did not object to the application for an extension of time made by China Evergrande Group.

This unexpected turn of events bought China Evergrande valuable time to postpone again.

According to the report, a special panel of major overseas bondholders, collectively holding more than US$2 billion of Evergrande and its guaranteed offshore notes, is planning to file a winding-up petition at the hearing.

Experts from the relevant departments in the industry pointed out that this move significantly increases the possibility that the relevant authorities will issue a winding-up order immediately.

Previously, China Evergrande had been pushing for a restructuring plan to avoid a winding-up.

However, at the end of September and the beginning of October 2023, the situation for the company changed dramatically.

At this time, Evergrande Real Estate and Xu Jiayin himself were successively investigated by the relevant Chinese authorities, which made Evergrande Group unable to meet the qualifications for the issuance of new notes.

Ahead of the winding-up hearing at the end of December last year, China Evergrande had urgently planned a debt restructuring plan in an attempt to avoid the risk of a possible imminent liquidation at the last minute.

It is reported that this plan covers the conversion of part of the offshore debt into the equity of the company and two Hong Kong-listed subsidiaries, and the repayment of the remaining debts through non-transferable "certificates" backed by overseas assets.

However, given the low viability of debt recovery and growing concerns about Evergrande's future, it is widely believed that creditors are unlikely to accept Evergrande's proposed new proposal.

Not long ago, on January 25, Evergrande Real Estate Group's subsidiary, Evergrande Real Estate Group, recently issued an announcement announcing that it was working on the rights and interests of one of its project companies.

According to the content of the announcement, the transferor Evergrande Real Estate Group Yuedong *** has reached an agreement with the transferee Shantou Hengyao Real Estate Development ***, in accordance with the provisions of the agreement, the transferor will transfer 65% of its interests in the project company (Shantou Hengming Real Estate Development***) to the transferee, with a total transaction consideration of 137.6 billion yuan.

It is worth mentioning that the transaction also includes the project company's waiver of part of the debts in the name of the transferor and its related associates, with a total amount of 37.6 billion yuan.

According to the latest disclosure by China Evergrande, as of the end of November 2023, Evergrande Real Estate is facing a huge amount of unpaid due debt, which has accumulated to about 3,1639.1 billion yuan, compared to 3013 at the end of October6.3 billion yuan, a significant increase.

According to the disclosure, as of the end of November 2023, the cumulative amount of overdue commercial bills of Evergrande Real Estate has reached about 20553.7 billion yuan.

As of the end of November 2023, the number of pending cases faced by Evergrande Real Estate in litigation has reached 2,053, with the subject amount exceeding 30 million yuan and the total amount accumulating about 4,9006.9 billion yuan, compared with 2002 pieces at the end of October, 47075.5 billion yuan, showing a significant increase.

It is worth noting that in the past 11 months, the company has added a total of 101 pieces of executed information, involving a total of about 130 executed amounts4.8 billion yuan.

According to Evergrande Real Estate's 2022 annual report, the company's total liabilities have reached 18,338$1.9 billion, while total assets are only $14,6855.7 billion yuan, showing an insolvent situation.

Taken together, Evergrande's response to the winding-up order reveals the internal and external pressures experienced by a company in the face of difficult circumstances, as well as the difficult choices of leaders in a crisis.