HK court orders Evergrande liquidation
Chan is expected to hand down her detailed reasons for the winding-up order later Monday and will handle the matter of appointing a liquidator
Daily TribuneChan is expected to hand down her detailed reasons for the winding-up order later Monday and will handle the matter of appointing a liquidator
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A Hong Kong court on Monday ordered the liquidation of China’s property giant Evergrande, but the firm said it would continue to operate in a case that has become a symbol of the nation’s deepening economic woes.
Once China’s biggest real estate firm, its astronomical debt of more than $300 billion had become emblematic of a years-long crisis in the country’s property market that had reverberated throughout the world’s second-largest economy.
The order kickstarts a long process that should see Evergrande’s offshore assets liquidated and its management replaced, after the company failed to develop a working restructuring plan.
The company’s executive director vowed the Hong Kong court’s decision would not impact its operations domestically, while analysts said the ruling would further erode foreign investor confidence in China.
“Given the obvious lack of the progress on the part of the company in putting forward a viable restructuring proposal and the insolvency of the company... I consider that it is appropriate for the court to make a winding up order against the company and I so order,” High Court judge Linda Chan said.
She added that Evergrande was expected to discuss a “viable proposal” with creditors, obtain a legal opinion and consult mainland Chinese authorities — but “none of that has happened.”
Chan is expected to hand down her detailed reasons for the winding-up order later Monday and will handle the matter of appointing a liquidator.
Evergrande’s executive director, Shawn Siu, called the decision “regrettable,” but vowed the company’s operations in China would continue.
In a statement, he said Evergrande’s Hong Kong arm was independent from its domestic subsidiary, and that “the Group will still endeavor to do everything possible to safeguard the stability of its domestic business and operation.”
Siu also said the company would “steadily push forward the key work of guaranteeing the delivery of buildings, maintain the quality of property services without being affected.”
Shares in Evergrande plunged 20.87 percent to HK$0.16 in Hong Kong following the ruling, before the stock exchange halted trading at 10:19 a.m. or 0219 GMT. Trading was also halted in Evergrande’s electric vehicle subsidiary.
However, the announcement had little effect on wider stock markets, with Hong Kong and Shanghai both up at the break.
WITH AFP
