Reporter Wang Lixin and trainee reporter Chen Xiao.
On the evening of March 6, China Evergrande announced that it had received a letter dated February 28, 2024 from the Stock Exchange, which contained guidelines for the resumption of trading in the company's shares.
There are three guidelines for resumption of trading, one is that the winding-up order against China Evergrande has been withdrawn or discharged and the appointment of any liquidator has been discharged; The second is to demonstrate that the company has complied with Rule 13 of the Listing RulesArticle 24; The third is to publish all important information to the market for the company's shareholders and other investors to evaluate the company's situation.
In response to the resumption guidance received, China Evergrande said that it is taking appropriate measures to resolve the issues that led to its suspension and fully complying with the listing rules to the satisfaction of the Stock Exchange. China Evergrande will publish further quarterly updates every three months from the date of suspension until resumption or delisting. The Stock Exchange indicated that if there is a change in the circumstances of China Evergrande, the Exchange may revise or supplement the resumption guidance.
Previously, Mr. Edward Simon Middleton and Ms. Wong Wing-sze of Ammann Consultants*** were appointed by the High Court of Hong Kong as liquidators of China Evergrande on the same day as a result of a winding-up order issued by the Hong Kong Court, which had suspended trading in China Evergrande** with effect from 29 January 2024.
In addition, the Exchange is required to delist any** that has been suspended from trading for 18 consecutive months. For China Evergrande, the 18-month period will expire on July 28, 2025.
It is worth mentioning that, in the view of many industry insiders, the most important of the above three resumption guidelines is that the winding-up order against China Evergrande has been withdrawn or discharged, and the appointment of any liquidator has been discharged.
So, is it possible for Evergrande to "survive" in the capital market in this way?
Huang Lichong, president of Huisheng International Capital, once said in an interview with the reporter that after the judge issued a winding-up order, he would nominate a liquidator and take over the company's business. In this process, there may theoretically be a new restructuring plan proposed by potential new investors, and if this plan can be accepted by the liquidators, submitted to the court, shareholders, and the general meeting of creditors for discussion and approval, it is still possible to cancel the winding-up order, but from some practical points, there is little hope.
In this regard, Wang Yuchen, director of Beijing Jinsu Law Firm, also told the reporter that if Evergrande can stabilize its financial situation through assets, debt restructuring and new financing, the company may gradually resume normal operations. However, if the winding-up and debt issues cannot be effectively resolved, the company may still face liquidation.
According to the "** reporter", it is not uncommon for Hong Kong-listed companies to be issued winding-up orders, among which the successful approval of the Hong Kong court to permanently suspend the winding-up order and remove the liquidator is rare, but there are also cases, there was one case in 2022, mainly due to the signing of a new restructuring agreement.
* |Station cool Hailuo production |Guo Zhichen audit |Edited by Zhao Xueyi |Qiao Chuanchuan final review |Peng Chunlai