July 12, 2024

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Chinese developer Evergrande wins more time for restructuring deal

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A Hong Kong judge has delayed a decision on Evergrande’s liquidation, an unexpected move that gives the Chinese property developer until next month to come up with a restructuring plan that satisfies its creditors.

Judge Linda Chan said on Monday that the proceedings would be adjourned until January 29 after a lawyer for Top Shine Global, an offshore creditor that brought a winding-up petition against the Chinese developer, said it would not oppose such a move.

Lawyers for Evergrande, the world’s most indebted property developer, said in court the company was considering a deal that included handing “certificates” to creditors. The certificates would be “neither a share nor a bond but a right to distribution based on certain assets”, said the company’s lawyer.

“We are very surprised by the developments,” said Neil McDonald, a restructuring lawyer at Kirkland & Ellis who represents a group of offshore creditors, outside the court after the hearing.

He said the creditor group had “firmly rejected” the proposal that Evergrande outlined, adding that he had expected the company to be wound up on Monday.

Evergrande shares jumped as much as 13 per cent on Monday, though they still trade 99 per cent below their 2017 peak.

The developer’s woes highlight the wider cash crunch in the country’s property sector, which made up roughly a quarter of China’s economic activity before it was engulfed by crisis. Evergrande had more than $300bn in liabilities when it defaulted in 2021.

A previous restructuring plan was derailed in September when the company said it could not issue the “new notes” required under the proposal because its mainland business was being investigated by Chinese authorities over alleged breaching of disclosure rules.

Judge Chan said “crucial details” of the new plan were missing and suggested Evergrande…

2023-12-04 00:52:41

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