China Evergrande: Hong Kong court adjourns winding-up hearing to December 4, signals last reprieve for developer to sort out its debt

A Hong Kong court has postponed a winding-up hearing against China Evergrande Group, the most indebted property developer in China with liabilities amounting to US$328 billion. This adjournment signals a final reprieve for the company, which has been struggling to restructure its debt over the past two years. The next hearing is scheduled for December 4, providing the Guangzhou-based developer with a five-week window to get its affairs in order and avoid liquidation. Justice Linda Chan, the presiding High Court judge, warned that a winding-up order is highly likely if no restructuring plan is presented by the deadline.

Justice Chan stated that this final adjournment would allow Evergrande more time to negotiate a deal that would yield higher returns to creditors than in the event of liquidation. She also noted that the developer had spent an excessive amount of time over the past 17 months in negotiations with creditors. Evergrande's stock value fell by 9. 3 per cent to HK$0. 21 on Monday in Hong Kong, after initially plummeting by as much as 23 per cent to a 52-week low of HK$0. 182. The company's stock has crashed by 99 per cent from its peak in 2021, wiping out HK$225 billion of its market value.

The winding-up petition was filed in June 2022 by Top Shine Global Limited, an offshore entity that Evergrande claims is owned by businessman Lin Ho-man. Top Shine and Lin's other private company, Triumph Roc International, initiated legal action to recover more than HK$1. 72 billion (US$220. 5 million) of investment in a scheme involving Fangchebao, Evergrande's online property and auto platform, in March 2021. The deal fell through after Evergrande plunged into financial distress six months later.