Kunpeng Project
Xu Jiayin finally arrives, and it may be difficult for overseas creditors to obtain any compensation
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After seven postponements, it did not escape the fate of liquidation.
Evergrande was recently ordered to wind up by the Hong Kong High Court, which also means that creditors may end up with less than a penny. The reason for Evergrande's liquidation dates back to more than a year ago, when GAIN Capital filed a winding-up application with the High Court of Hong Kong, with a liability of about 8HK$62.5 billion. In order to buy time, Xu Jiayin kept postponing the hearing, hoping to find a solution to the problem. However, Evergrande's debt is too large: as of the end of 2022, Evergrande has a debt of 24 trillion yuan, with total assets of only 174 trillion yuan, the situation of insolvency is very grim. accompanied by Xu Jiayin and his ex-wife Ding Yumei"Silent technical divorce", creditors began to recognize the true face of Xu Jiayin, and decided to ** Evergrande assets as soon as possible, so as to avoid greater losses at that time. The Hong Kong High Court judge also expressed dissatisfaction with Hui's delay, arguing that Evergrande was no longer able to propose a concrete debt restructuring plan. Faced with this situation, Xu Jiayin could only sell his property to repay his debts.
How is the money repaid after the company is dissolved?
Evergrande's liquidation raises the question that all creditors are most concerned about, that is, how much money can be recovered. According to the priority order of the Hong Kong courts, preferential claims include workers' compensation, social security and debts to the state; secondly, claims secured by assets, including liquidation costs; Finally, there are unsecured creditors, including ordinary claims, interest on debts and shareholder claims. Evergrande cited Deloitte's analysis at a Hong Kong court hearing in July last year as saying that in the case of liquidation, the rate of ** available to creditors is less than 3%. This means that creditors will only be able to recover about one-third of the initial amount, and most of the rest will be losses. Overseas creditors fear they will cry without tears.
Overseas creditors burst into tears.
Evergrande's bankruptcy liquidation is undoubtedly a major blow to overseas creditors. Today, Evergrande has few assets left, of which only Evergrande Automobile and Evergrande Real Estate are more valuable. Although Evergrande Automobile is heavily indebted, it still has a certain attractiveness due to its vehicle production qualification. Evergrande Real Estate is also a high-quality asset, which has attracted 20 billion yuan of capital acquisition from Hopson Development. However, Evergrande Real Estate was also hollowed out by Xu Jiayin. Due to the huge debt that Evergrande is currently facing, even the shares of ** Evergrande Automobile and Evergrande Real Estate cannot repay the debt. In addition, even if foreign creditors want to liquidate these subsidiaries, they have to go through a series of procedures. As a result, foreign creditors are likely to not get a penny back.
Lessons and reflections on Evergrande's liquidation.
Evergrande's bankruptcy liquidation is a wake-up call for creditors and an important lesson for other large companies. First of all, enterprises should raise funds reasonably and avoid over-indebtedness. The main reason for Evergrande's bankruptcy is that the scale of liabilities is too large, far exceeding the size of assets, and it is difficult to survive in the event of a payment crisis. Second, enterprises must strengthen internal management, standardize operations, and prevent misappropriation of funds. Evergrande's negative case shows that the misconduct of entrepreneurs can cause huge losses to creditors. Finally, it is necessary to establish a solid regulatory mechanism, strengthen the supervision and management of enterprises, and discover and resolve potential credit risks in a timely manner. In this way, the interests of enterprises and creditors can be effectively protected.
Overall, the liquidation of Everest was a desperate outcome for creditors. It is impossible for overseas creditors to get back a penny. Faced with this situation, what Evergrande's creditors can do is to ** Evergrande's assets as soon as possible and strive to recover the arrears to the greatest extent. At the same time, this situation is also a wake-up call for other companies to raise funds reasonably, operate normally, and strengthen internal management to avoid falling into a similar situation. It is also necessary to strengthen supervision, discover and resolve potential credit risks in a timely manner, and protect the interests of enterprises and creditors. In conclusion, the Evergrande liquidation case is an important lesson that deserves in-depth analysis and learning from all parties.
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