Evergrande's finale is coming, and this event has become the focus of attention. According to CCTV News, the latest news from China Evergrande's High Court in Hong Kong indicates that they will have to face compulsory liquidation, which has also led to the suspension of Hong Kong stocks China Evergrande, Evergrande Auto and Evergrande Property.
Liquidation, simply put, is the process by which a company is forced into bankruptcy and liquidation. According to the law of Hong Kong, when a company owes a large amount of debt, the creditor can file a winding-up request with the court, and the court will conduct a corresponding review, and if the conditions are met, a compulsory winding-up order will be issued, which means that the company will undergo compulsory bankruptcy liquidation.
Given Evergrande's current predicament, a settlement with creditors seems unlikely, especially after the arrest of Liu Yongzhuo, the company's executive director. Evergrande's fate seems to have been sealed, and this is an irreversible situation.
The incident has also sparked concern among investors, especially those who had trusted Mr. Xu's promises. Boss Xu had promised not to let the investors get nothing, but the reality was diametrically opposite, the investors were almost worthless, and Boss Xu was accused of transferring property behind his back. Especially in August last year, rumors about Boss Xu's "technical divorce" attracted widespread attention, and this behavior discredited Boss Xu in the eyes of everyone.
Boss Xu used to be known as a person who was good at acting, but now, his promise of guaranteed delivery seems to have become empty talk. Evergrande has sold 677 projects but not delivered them, and the delivery data for the past year has not been made public. In addition, Evergrande's projects are mainly distributed in third- and fourth-tier cities, which have been hit harder. And Evergrande's aggressive sales strategy in the past has also made it very difficult to hand over the property.
For Evergrande Automobile, it was once regarded as one of the most high-quality assets in the hands of Evergrande, and Liu Yongzhuo was considered to be the best person in Xu Jiayin. However, with Liu Yongzhuo's coercive measures taken by the public security organs, Evergrande's prospects have become very bleak. The company's financial reports showed that total assets were far from enough to cover the huge debt, which put Evergrande in a difficult position.
For those Evergrande owners who have purchased a house but have not yet delivered it, the future is also full of uncertainty. Although the court will first give priority to protecting the 600 billion yuan of unpaid building payments, some of Evergrande's undelivered projects are in first- and second-tier cities, or most of the construction projects have been completed, and may be delivered as soon as possible. However, for a large number of projects located in third- and fourth-tier cities, as well as projects that have been sold out but have not yet completed construction, there will be huge difficulties in handing over the property.
For Xu Jiayin, who has already had a "technical divorce", he may usher in a fair verdict. However, Evergrande's debt includes both onshore debt and a large amount of offshore debt. Although Boss Xu is divorced, these debts were accumulated during the marriage, and foreign creditors are likely to pursue his ex-wife and demand that she bear the corresponding liability. Therefore, Boss Xu may really end up with nothing.
Evergrande's bankruptcy marked the end of an era of real estate frenzy, which left many valuable lessons to be learned. We must bear these lessons to heart in order to avoid something like this from happening again. This incident has triggered deep thinking about China's real estate market and financial system, and also reminded us to be more cautious in investment and risk management. At the end of the article, one can't help but wonder whether Evergrande's bankruptcy is a sign that greater challenges and opportunities await us. Looking forward to the readers' comments to discuss, together with the possibility of the future.