Since the first thunder was ignited in 2021, Evergrande's subsequent situation has begun to get out of control.
In two and a half years, Evergrande has gone from a large number of assets being frozen, to Chairman Xu Jiayin being taken away, and then Zhao Changlong was ordered to "ensure the delivery of the building", but he was unable to return to the sky, and now Evergrande is about to usher in the "finale".
On January 29, Hong Kong's Supreme Court issued an order declaring Evergrande Group insolvent and requiring it to be liquidated immediately.
In fact, it should have been liquidated a long time ago, Evergrande had already made a winding-up petition on June 24, 2022, but it was delayed again and again in the subsequent hearings.
From the original date of August 31, 2022 to January 29 this year, it has been postponed 8 times and dragged on for 18 months.
However, now Evergrande can no longer drag on, and Evergrande Group is currently in liquidation on the Hong Kong stock market, and its related Evergrande Automobile, Evergrande Property and other companies have also been suspended intraday.
It is said that "early bankruptcy and early compensation", and Evergrande's delay in liquidation before also made many creditors anxious.
But now that it is time for liquidation, some people have raised a new question, whose debts will Evergrande repay first after liquidation? Is it the banks, the investors, or the general public who have not gotten their hands on a house?
After Evergrande was declared liquidated, we have to understand what kind of operation liquidation is, it is similar to bankruptcy, it is a legal procedure.
After the start of liquidation, all production and operation of Evergrande will be stopped, and all assets of the company, including plants, offices, tools, etc., will be exchanged for cash in the short term, and then the debts will be repaid in order.
After the winding-up order, Evergrande also issued an announcement on February 1, publicizing their current debt situation and the debts they have repaid.
According to the announcement given by Evergrande, there are 2,073 pending litigation cases with a subject amount of more than 30 million yuan, with a total amount of 5,0259.6 billion.
In addition, the unpaid debts due are 2978100 million yuan, overdue commercial bills 20500.4 billion yuan.
However, as of the end of December last year, Evergrande has transferred 82 real estate projects through a series of methods such as equity transfer, trust, and nominee holding.
However, this is only a fraction of Evergrande's total of 778 uncompleted real estate projects across the country.
Before the suspension and liquidation, Evergrande's last share price in Hong Kong stocks was 0163 Hong Kong dollars, and the total market value has also fallen from 311.6 billion Hong Kong dollars at the peak to only 21 today500 million Hong Kong dollars, shrunk to less than 1%.
Many people can't help but ask, with this market value and remaining assets alone, can Evergrande repay this massive debt?
Evergrande's main and largest creditors are various financial institutions and trust companies at home and abroad, and then there is money owed to ** merchants and contractors.
In addition, there are also the majority of homeowners who have paid the money but the delivery is far away, which is also the largest number of creditors in the Evergrande group.
After the Evergrande thunderstorm, the most anxious and injured are also this group of homeowners, who use their hard-earned savings for many years to buy a house but buy an unfinished house.
And after Evergrande announced its liquidation, these creditors had a new trouble, that is, who would pay back the money after Evergrande's liquidation?
Because Evergrande's liquidation proceedings were carried out in Hong Kong, most of the debts owed by Evergrande were in the mainland, and even most of its assets were distributed in various cities in the mainland.
However, because Hong Kong's company law is different from that of the mainland, the priority of debt repayment will also be different, which makes many mainlanders, especially those homeowners, feel a little worried.
In this regard, some people have also analyzed that after Evergrande completes the grab, the most likely first person to repay should be those homeowners who are looking forward to handing over the house.
After all, after Xu Jiayin was taken away and Zhao Changlong took over Evergrande, the main task was to ensure the delivery of the building, but the debt situation was too serious, which made Evergrande's debt restructuring work difficult, and finally came to the step of liquidation.
However, it is a matter of people's livelihood and stability to ensure the delivery of the building first, so the possibility is still very large.
After that, it should be in accordance with the legal procedures and time sequence, and then deal with the debts of the bank, the creditor company and the following ** businessmen who have cooperated with Evergrande.
As for whether the debts can be fully paid off in the end, it is difficult to say, and it depends on how much money will be left after Evergrande's liquidation.
However, it is worth noting that the general method of liquidation is, in the final analysis, to sell assets to pay off debts, but whether to sell them or not is also a difficult problem.
Evergrande's properties, projects, land and even office buildings or office vehicles are all assets that can be sold, but they are also divided into high-quality assets and non-performing assets.
For example, office buildings, office vehicles, land or projects with clear property rights and no mortgage are high-quality assets, while assets with chaotic property rights or disputes are non-performing assets.
The difference between the two is not only in value, but also a question of whether it is good or not.
After all, non-performing assets are like a "hot potato", although they may bring benefits to the receiver in the later stage, they can also bring losses due to various disputes and creditor's rights.
Moreover, Evergrande's current situation is still quite a lot of non-performing assets, which further compresses the funds that Evergrande can collect after liquidation.
Although Evergrande has ushered in the "finale", where Evergrande will go in the end has to wait until everything settles.
I just hope it can be a happy endding in the end.