Troubled property giant China Evergrande Group is reportedly facing imminent liquidation after failing to reach a deal with overseas creditors over the weekend.
Over the weekend, China Evergrande was in talks with overseas creditors on a deal that would allow the world’s most indebted property developer to continue its operations, according to a «Wall Street Journal» report citing unnamed sources. Unfortunately, discussions failed to result in an agreement and the firm now faces imminent liquidation.
The liquidation of Evergrande, which has over $300 billion in liabilities, will be a complex and lengthy process though it is not expected to have an impact in certain facets, such as home construction projects in the near term.
Ad Hoc Group
Evergrande has been working on a $23 billion debt revamp plan with an ad hoc bondholder group, which includes hedge funds, owning $2 billion in offshore notes guaranteed by the Chinese developer.
According to a «Reuters» report last week, the ad hoc group is planning to join a petition to liquidate Evergrande in a hearing in a Hong Kong court on Monday. This follows opposition against a revised restructuring plan presented by Evergrande in December 2023. The group is being advised financially by Moelis & Co and legally by Kirkland & Ellis.
Top Shine
The petition was first filed in June 2022 by Top Shine, an investor in Evergrande unit, Fangchebao. According to Top Shine, Evergrande failed to honor an agreement to repurchase shares it bought in the subsidiary.
