After many delays, the liquidation of China Evergrande ("Evergrande") is now finally settled.。

court formally issues winding-up order

According to the official website of the Judiciary of Hong Kong, China, on the morning of January 29, the High Court of Hong Kong held a winding-up petition hearing against Evergrande.。At the hearing, the court finally formally issued a winding-up order against Evergrande。In the afternoon, the High Court of Hong Kong will sit to deal with the regulatory order and issue written reasons.。

Evergrande's winding-up application dates back to 2022。On June 24, 2022, Jiasheng Global filed a winding-up petition against China Evergrande with the High Court of Hong Kong, involving a claim in the amount of 8.HK $62.5 billion。Since then, Evergrande has submitted eight petitions for adjournment of hearings in order to advance its debt restructuring plan。The last extension application was announced on December 4, 2023.。

After the court officially issued the winding-up order, the three listed companies of Evergrande (China Evergrande, Evergrande Automobile and Evergrande Property) all suspended trading at 10: 18 or 10: 19 a.m. on the 29th.。During the period between the opening and suspension of trading on the 29th, China Evergrande plunged more than 20% to 0.HK $163; Evergrande Auto plunges more than 18% to 0.HK $229; Evergrande Properties down 2.5%, now 0.HK $39。

The debt restructuring process was impeded or the main reason for the judge's winding-up order.。

According to media reports, in court, Judge Chen Jingfen decided to issue a winding-up order because he thought Evergrande had spent a year and a half but its debt restructuring plan was still going nowhere.。

In addition, there have been media reports that a special group of major overseas bondholders joined the winding-up petition before the winding-up order took effect, which may have contributed to Evergrande's eventual winding-up order.。It is reported that this special group holds a total of more than $2 billion in offshore bonds guaranteed by Evergrande and its。

Evergrande Response

After the winding-up order came out, Evergrande Group CEO Sean came out to respond that the Group and China Evergrande had done their best to defend the overseas winding-up petition.。However, objectively, the operation of the Group is facing great difficulties and extremely limited resources, while the initial voting of creditors did not meet expectations, and Evergrande Real Estate has been investigated by the China Securities Regulatory Commission, the actual controller of the Group and other suspected crimes have been taken compulsory measures in accordance with the law, the Company also believes that it is unable to meet the relevant legal conditions of the key links of overseas debt restructuring, these circumstances make all kinds of uncertainty continue to strengthen, so that。Today's court ruling is contrary to the company's original intentions, for which the company can only say that it has done its best and is very sorry.。

Sean said that next, the Group will face up to difficulties and problems, take all legal and compliance measures, and steadily promote the normal operation of the Group's business on the premise of protecting the legitimate rights and interests of domestic and foreign creditors, while also actively communicating with the liquidator, in accordance with the law to cooperate with the liquidator to perform relevant procedures, in accordance with international practice, market rules to promote debt resolution and other work.。

In addition, Sean also stressed that the court issued a foreign winding-up order involving the main body is listed in Hong Kong, China Evergrande。At present, the management and operation system of Evergrande Group and other domestic and foreign subsidiaries as independent legal entities remains unchanged.。The Group will continue to make every effort to ensure the stability of its domestic business and operations, steadily promote key work such as the Baojiao Building, maintain the quality of property services from being affected, will continue to make every effort to ensure the smooth promotion of risk resolution and asset disposal, and will continue to make every effort to promote all work fairly in accordance with the law.。

According to Evergrande's 2023 interim report, as of June 30, 2023, the Group's total assets amounted to 1,744 billion yuan (RMB, the same below) and total liabilities amounted to 2,388.2 billion yuan.。In addition, the Group's total cash and cash equivalents and restricted cash amounted to 133.800 million yuan。

What is the impact on the parties？

Liquidation is a legal process。Once the company goes into liquidation, the company's production operations cease and all assets (including properties, patents, claims and securities) are sold in the short term and used to pay off the company's debts, after which the company will be declared dissolved in accordance with legal proceedings.。

As a general rule, once a company is wound up by court order, it cannot change the ownership of its assets and the power to manage all the affairs of the company will pass from the directors or shareholders to the liquidator。

For the creditors of the company, in order to fight for their own interests, they may fill out a proof of claim form and submit it to the provisional liquidator with all supporting documentation to support their recovery.。The provisional liquidator or the appointed liquidator will examine the above form and, upon repayment of the debt, will issue a notice of determination to notify the creditors of the outcome of the examination.。If a bond certificate application is not accepted, the parties concerned will explain why。If creditors are not satisfied with the interpretation, they may continue to appeal to the court.。

In the case of the directors of a company, if the provisional liquidator is the Official Receiver in Hong Kong, the officers of the Official Receiver will conduct a preliminary examination of the directors of the company concerned and the directors must answer all questions raised during the examination。In addition, the directors or principals of the company are required to submit a statement of position (i.e., the company's balance sheet as of the date of appointment of the provisional liquidator) to the provisional liquidator for inspection within the specified period.。If the directors or related persons of the company fail to submit or delay the submission of the statement of assets and liabilities, the directors or related persons of the company will be controlled by the prosecution.。

In addition, the provisional liquidator will convene the first meeting of creditors and the meeting of contributories within three months of the court's winding-up order.。When two meetings are held, all directors of the company are usually required to attend。The main purpose of the above meeting is to determine who is to be appointed as the liquidator of the company and whether a review committee is required.。The role of the review committee is to assist in the processing of the company's assets and other matters.。