This article is from the Australian Property Journal archive
CHINA’S Evergrande has been given a surprise two-month reprieve after a judge in Hong Kong held the world’s most indebted developer back from the brink of collapse.
Evergrande, at the epicentre of China’s property crisis, was expected to be plunged into liquidation as it battled to pay back billions of dollars owed to foreign investors, with independent liquidators from KPMG poised for the appointment.
Instead, judge Linda Chan have Evergrande a two-month extension. It is due back in court on 29th January.
Evergrande had a $23 billion offshore debt restructuring plan in the works, but that dissipated in October it was confirmed last month that billionaire founder Hui Ka Yan had been detained by Chinese police and put under surveillance, and that he was reportedly being investigated over allegations that he attempted to assets offshore while the company struggled to finish projects.
Evergrande was plunged into more than $400 billion of debt in 2021 following Beijing’s “three red lines” crackdown on the amount large developers could borrow. That spread throughout the country’s enormous real estate sector. China’s biggest private developer, Country Garden was deemed to be in default on a dollar bond for the first time recently and is in its own fight for survival.
Evergrande now has debts of $498 billion. It lost a combined $118 billion over 2021 and 2022.
