On January 29, Hong Kong court Ching-Fen Chan issued a winding-up order against China Evergrande, appointing the liquidator of the law firm Alvarez &Marsal, A&M, which had been responsible for liquidating Lehman Brothers' law firm.
Ammann Law Firm stated that the liquidation order only applies to China Evergrande Hong Kong.
According to the liquidation order, the de facto controller of China Evergrande will be changed to Ammann, and Ammann can effectively take over the subsidiaries of China Evergrande Hong Kong by replacing them as legal persons.
China Evergrande, under the guidance of the liquidators, will pay for the aggressiveness of the past. According to the Hong Kong court ruling, the liquidators will take over Evergrande's assets, books, seals, etc., and contact the directors of Evergrande to submit a statement of affairs.
Shawn Siu, CEO of Evergrande Group's Shenzhen headquarters, expressed "regret" over the court's decision.
After the winding-up order was issued, the trading of China Evergrande and its listed subsidiaries was suspended.
China Evergrande Hong Kong Company can appeal against the winding-up order, but the winding-up proceedings will continue during the appeal period.
Evergrande Group entered the real estate industry in 1997, and the first real estate project "Jinbi Garden" developed by the group was sold out in just two hours after the opening, which greatly strengthened Evergrande's determination in the real estate field.
In 2018, Evergrande Group entered its heyday and began to get involved in automobile manufacturing, tourism, health, film and television and other fields.
In 2021, the real estate market under the mask crisis** fell by as much as 30%, Evergrande defaulted on its debt for the first time, and Xu Jiayin himself was also suspected of fraud.
Judge Chen Jingfen's decision paved the way for Evergrande's assets to recover part of its debts.
As of the date of the judgment, foreign investors held a total of US$23 billion of Evergrande's debt, less than one-tenth of Evergrande's total debt.
Evergrande Group has a total debt of 308 billion euros, most of which is owed to small Chinese banks and subcontractors.
Deloitte estimates that if liquidated, only 34% can be recovered. If Xu Jiayin's non-standard operation is added, industry insiders believe that up to 3% can be recovered.
The liquidation of China Evergrande marks that the risk clearance of the real estate industry is further accelerating, or bankruptcy liquidation, completely bidding farewell to the stage, or showing more sincerity and cutting meat to save themselves.
After experiencing the pain brought about by the clearing of risks, the real estate industry will also enter a new era in which stability is king.