On January 29, China Evergrande was arraigned again in the High Court of Hong Kong. The judge formally ordered China Evergrande to wind up. Although the liquidation is only China Evergrande, not the entire Evergrande Group, it still means that Evergrande, which has been struggling for more than two years, has finally begun to enter a new stage.
In fact, as early as June 2022, some creditors filed a winding-up petition against Evergrande to the Supreme Court of Hong Kong. However, China Evergrande and some creditors have always held out a glimmer of hope that the main body of the company can be retained through debt restructuring and other means, so that creditors may be able to get more money back in the future. As a result, the hearing of the winding-up petition in respect of Evergrande has been adjourned seven times in total. Now that the winding-up order has been issued, this shows that the court believes that Evergrande has completely lost the ability to come back to life, so this last hope is dashed.
From the beginning of the liquidation, China Evergrande ceased operations and was taken over by the liquidators, who liquidated all the assets under its name and used them to repay its debts. So how much can the creditor get back? According to the law, the order of repayment of the company is to pay off all the expenses required for the bankruptcy proceedings, then the arrears of employees' wages and labor insurance costs, then the arrears of taxes, and finally the remaining repayment to creditors. At present, Evergrande owes 24 trillion, of which the money owed to upstream and downstream ** businessmen is about 1About 1 trillion, about 600 billion owed to financial institutions, about 700 billion unfinished buildings that have not been delivered, and the total assets are only 174 trillion. In this 1There must still be water in 74 trillion miles, and a large number of assets are actually difficult to realize, such as a large number of commercial houses that cannot be sold.
This time, China Evergrande's liquidation is facing an extremely complicated situation. Its assets, equity, and debts are very complex, some are in China, some are in Hong Kong, and some are in the Cayman Islands and other places. The laws are different in different places, and there was no Chinese company of Evergrande's size before liquidation, so there are still many unknowns about the specific implementation. In the previous restructuring plan of Evergrande, you can have a general reference. The creditor rate is about 205%~9.34%, which means that at most, you can only get back about 10%.
In addition, there is a special situation, that is, the issue of ensuring the delivery of the building. On April 20 last year, the Supreme Court announced the reply of the Supreme People's Court on the protection of the rights of consumers of commercial housing. It clarifies that if the buyer has paid the full amount of the home, then their right to claim the delivery of the home is the highest priority. That is to say, after all the previous taxes and fees are paid, among all creditors, whether the buyer is in the first place, he still has to pay the house first, and then pay the rest to others. So buyers can still be a little more relieved, this is a general order.