On January 29, the Hong Kong court issued a winding-up order against Evergrande, and Evergrande Real Estate was suspended. Although Evergrande Property and Evergrande Automobile soon resumed trading, Evergrande's fate has been irreversible4 trillion debts crushed and are falling.
What is a winding-up order?
Simply put, the company is insolvent and the company is required to immediately cease operations and begin the liquidation of its assets. This means that the company is about to face bankruptcy and fully liquidate its assets (including real estate, ** bonds, etc.) to pay off its debts.
Bankruptcy is a foregone conclusion, and it is only a matter of time.
This is the first real estate company to be liquidated in 2024, and it is also the first giant to fall, and it does not even have a chance to struggle.
For real estate companies, in fact, debt is not terrible, what is terrible is that there is no capital, resulting in a snowball of debt. The funds of real estate companies are nothing more than three channels, one is to sell houses, the second is to borrow, but unfortunately Evergrande has no chance.
How did Evergrande change from the first real estate company in the universe to the first debt in the universe? In the final analysis, it is because of blind expansion and diversification. Evergrande football, Evergrande automobile, Evergrande mineral water... Evergrande's stall is too big, but in addition to real estate and property, Evergrande's other industries are almost not profitable, and there is no problem in the ** era of real estate, Evergrande real estate can support other industriesHowever, the three-year mask incident, the cold winter has entered the bones, and Evergrande Real Estate is also a mud bodhisattva crossing the river, and it is difficult to protect itself, let alone feed other industries.
When the giants fall, it is the investors and buyers who are still hurt. Investors don't have to be too sympathetic, after all, any investment is risky, but many home buyers, it is the whole family to scrape together enough down payment to buy a house, and it is a blessing in misfortune to be able to deliver smoothly, and the most painful thing is those properties that have not yet been delivered.
After being liquidated, Evergrande only had to go through the procedure - to evaluate and auction Evergrande's assets to repay debts, of course, there is also a sequence of repaymentAfter the repayment of the senior debt, if there is still biological funds, they are repaid to other creditors on a pro rata basis until the assets are exhausted and the bankruptcy proceedings are concluded.
What are the priorities for debt repayment? When will it be the buyer's turn?
First of all, it is certainly the mortgage debt of the bank, then the wages and taxes, and finally the other debts.
Legally speaking, after the buyer buys the house, if it is not finished, the buyer's relationship with Evergrande will become a debt relationship, but it is difficult to recover this money, because Evergrande has no money, even if it is bankrupt and liquidated, the buyer's priority is very low.
There aren't many options for home buyers.
The best outcome is that Evergrande can complete the delivery task before it completely collapses. Or, local urban investment enterprises take over these unfinished projects, continue to invest funds, and finally achieve delivery. However, when it comes to the liquidation and division of assets, it will definitely take a long time, whether it will take three or five years, or ten or eight years, it is difficult to say.
Unlike before, even if a real estate company was in trouble, a white knight would soon appear to save the other party from fire and water. But now, it is not easy for me to live safely.
Of course, there will be a lot of favorable real estate policies introduced in 2024, and some second-tier cities have begun to lift purchase restrictions, what will happen to first-tier cities?
Whether it is at the policy level or at the capital level, real estate in 2024 will receive more support, but this has nothing to do with Evergrande.
The real estate market in 2024 is still worth looking forward to.
Evergrande is a good warning, steady and steady, do a good job in quality, do not blindly pursue scale, create high-quality projects, and find a new way of development, from development to operation and service, I believe that real estate will usher in a bright future.
The future is promising.