Hong Kong High Court orders the liquidation of Evergrande

The real estate giant experiences sharp falls on the stock market and suspends its listing

The Hong Kong High Court this Monday ordered the liquidation of the Chinese real estate giant Evergrande after failing to present a proposal to restructure its debt, which amounts to 328 billion dollars (about 302 billion euros).

"The hearing has lasted a year and a half and the company has not yet been able to present a concrete restructuring proposal. I think the time has come for the court to say enough is enough," Judge Linda Chan said during the hearing, according to has published the Chinese newspaper 'South China Morning Post'.

This decision, which has become the first liquidation order issued by the city court, can still be appealed, although this same day will be assigned to the provisional liquidator to begin managing the restructuring of the debt with the creditors and take control of your assets, books and records.

Following the announcement, shares of Evergrande Group on the Hong Kong Stock Exchange have plummeted almost 21 percent, those of Evergrande New Energy Vehicle have fallen 18 percent and those of Evergrande Property Services Group Limited have fallen 2.5 percent. percent, so the group has decided to suspend trading in its shares.

This court order faces the challenge of being recognized by any of the competent courts in mainland China, where the company has more than 1,200 projects in various stages and where the liquidators will have limited enforcement powers without the support of one of the three courts.

The order has come after a series of extensions to the hearing, which had been granted precisely to be able to carry out a restructuring of its debt.

In June 2022, the company Top Shine Global, based in Samoa, decided to sue the company, denouncing that it did not fulfill its obligations to repurchase the shares that the investor had acquired in Fangchebao, a subsidiary of Evergrande.

The company's financial difficulties worsened last September, when the founder of Evergrande, Hui Ka Yan, was placed under arrest on suspicion of having committed several crimes, and the impossibility of carrying out new debt issues as a result of the investigation of one of its main subsidiaries, Hengda Real Estate.