Today: March 04, 2024
Today: March 04, 2024

Hong Kong court puts off Chinese developer Evergrande's hearing on its debt restructuring to January

Share This
Hong Kong court puts off Chinese developer Evergrande's hearing on its debt restructuring to January
AP
ZEN SOO and KANIS LEUNG
December 02, 2023

HONG KONG (AP) — A Hong Kong court postponed until Jan. 29 a court hearing scheduled for Monday on troubled Chinese property developer Evergrande’s winding-up petition.

Evergrande is trying to win support from its creditors for a plan to restructure more than $300 billion in debt to stave off liquidation. The company’s lawyer told the court it was requesting an adjournment to “refine” its new debt restructuring plan.

The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times. Judge Linda Chan had said in October that Monday’s hearing would be the last before a decision is handed down.

Evergrande could be ordered to liquidate if creditors reject its plan.

The company, the world’s most indebted property developer, ran into trouble when Chinese regulators cracked down on excessive borrowing in the real estate sector.

Neil McDonald, a lawyer at Kirkland and Ellis which represents a group of creditors, described the adjournment as a “surprise.”

Evergrande's Hong Kong listed shares rose as much as 20% Monday and were up 9.2% in the afternoon.

On Monday, the company issued a statement refuting claims in a report by Hong Kong-based GMT Research that Evergrande was never profitable and had overstated its revenue for years.

Evergrande said GMT's report was “without basis." It said it would provide more clarification in due course.

Last month, the company said Chinese police were investigating Evergrande’s chairman, Hui Ka Yan, for unspecified suspected crimes in the latest obstacle to the company’s efforts to resolve its financial woes.

In September, Evergrande abandoned its initial debt restructuring scheme after authorities banned it from issuing new dollar bonds, which was a key part of its plan.

The company first defaulted on its financial obligations in 2021, just over a year after Beijing clamped down on lending to property developers in an effort to cool a property bubble.

Evergrande is one of the biggest developers to have defaulted on its debts. But others including Country Garden, China’s largest real estate developer, have also run into trouble, their predicaments rippling through financial systems in and outside China.

The fallout from the property crisis has also affected China’s shadow banking industry — institutions which provide financial services similar to banks but which operate outside of banking regulations.

Police are investigating Zhongzhi Enterprise Group, a major shadow bank in China that has lent billions in yuan (dollars) to property developers, after it said it was insolvent with up to $64 billion in liabilities.

Real estate drove China’s economic boom, but developers borrowed heavily as they turned cities into forests of apartment and office towers. That has helped to push total corporate, government and household debt to the equivalent of more than 300% of annual economic output, unusually high for a middle-income country.

To prevent troubles spilling into the economy from the property sector, Chinese regulators reportedly have drafted a list of 50 developers eligible for financing support, among other measures meant to prop up the industry.

Popular

'Uncommitted' protest aims at Minnesota over Biden's Israel support

By Nandita Bose MINNEAPOLIS (Reuters) - The "uncommitted" movement to pressure U.S.

Yemen's Houthis say they targeted 'Israeli ship MSC SKY' in the Arabian Sea

CAIRO (Reuters) - Houthi military spokesperson Yahya Sarea said on Monday the Iran-aligned group had targeted the "Israeli ship MSC SKY" in the Arabian sea.

First lady Jill Biden honors 'women of courage' at White House

First lady Jill Biden is hosting a White House ceremony honoring “women of courage” from around the world

US sanctions Zimbabwe president Emmerson Mnangagwa over human rights abuses

The United States has sanctioned Zimbabwe’s President Emmerson Mnangagwa, the First Lady and other government officials for their alleged involvement in corruption and human rights abuses

Top 10 shuffle in women's AP Top 25 as Stanford and Iowa move up behind No. 1 South Carolina

No. 2Stanford and No. 3 Iowa have jumped up behind top-ranked South Carolina in The Associated Press Top 25 women’s basketball poll

Fed's Bostic: No urgency to cut interest rates given US economy's strength

By Howard Schneider WASHINGTON (Reuters) - The U.S.

Related

Nippon Steel exec to meet USW head to seek support for U.S. Steel deal

By Yuka Obayashi and Ritsuko Shimizu TOKYO (Reuters) - A senior Nippon Steel executive told Reuters he is set to meet the United Steelworkers (USW) union chief this month to seek support for acquiring

First over-the-counter birth control pill in US begins shipping to stores

The first over-the-counter birth control pill will be available in U.S. stores later this month

Ohio foundation begins process to distribute millions in opioid settlement money

Ohio is ready to begin doling out hundreds of millions of dollars in opioid settlement money to community and government organizations

American Airlines to buy 260 new planes from Airbus, Boeing and Embraer to meet growing demand

American Airlines is ordering 260 new planes to meet growing travel demand and increase the airline’s supply of premium seats

- Advertisement -
Advertisement: Limited Time Offer