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(Reuters) – A Hong Kong court on Monday ordered the liquidation of China Evergrande Group.
Evergrande is the world’s most indebted property developer and at the center of an unprecedented liquidity crisis in China’s real estate sector, which accounts for about a quarter of the world’s second-largest economy.
Once China’s top-selling developer, Evergrande’s financial crisis became public in 2021, and since then the company and its peers have taken on offshore debt amid weak home sales and fewer new financing options. The failure to comply has raised concerns that the virus could spread more widely. to the country’s bank.
Below is a timeline showing how the Evergrande debt crisis unfolded.
August 2021
Many Evergrande projects across the country have halted construction due to payment delays.
China’s central bank and banking watchdog summoned senior executives in an unprecedented warning that Evergrande must reduce debt risks and prioritize stability.
September 2021
It has defaulted on two offshore bond coupon payments totaling $131 million. He has a 30 day grace period for payment.
Evergrande has engaged financial advisors to weigh its options and warns of cross-default risks due to a sharp decline in real estate sales.
November 2021
Founder Hui Kar Yang will sell 1.2 billion shares worth HK$2.68 billion ($342.7 million), reducing his stake in Evergrande from 77% to 67.9%.
March 2022
Evergrande suspended trading in its stock due to its failure to release the audit results by March 31 and an investigation into its real estate management department, where banks seized 13.4 billion yuan in deposits.
November 2022
The mansion owned by Chairman Evergrande, located in Hong Kong’s upscale residential area The Peak, has been seized by financier China Construction Bank (Asia).
December 2022
Evergrande said it has resumed work on 631 sold and undelivered projects.
January 2023
Evergrande announced that its auditor at the time, PricewaterhouseCoopers, has resigned due to disagreements over matters related to its 2021 financial audit.
February 2023
The independent committee found that Evergrande’s directors had “substandardly fallen” by being involved in diverting loans secured by Evergrande Real Estate Services to the group.
March 2023
Evergrande has announced an offshore debt restructuring plan, giving creditors the option to swap their debt into new debt or equity-linked products backed by the group and two Hong Kong-listed companies.
April 2023
According to Evergrande, 77% of Class A debt holders and 30% of Class C debt holders expressed support for the restructuring plan.
July 2023
Evergrande posted net losses of 476 billion yuan and 105.9 billion yuan in 2021 and 2022, respectively, compared with a net profit of 8.1 billion yuan in 2020, a period of normal operation.
August 2023
Evergrande has announced plans to seek protection under Chapter 15 of the U.S. Bankruptcy Code. The law protects reorganizing non-U.S. companies from lawsuits and creditors who want to tie up their U.S. assets.
Evergrande reported a loss of 33 billion yuan in the January-June period, compared with a loss of 66.4 billion yuan in the same period last year.
Evergrande shares have resumed trading for the first time in 17 months, having lost 79% of their market value since they last traded.
September 2023
China’s State Financial Supervisory Administration has approved the establishment of a state-owned insurance company that will take over all assets and liabilities of Evergrande Life Insurance, a 50%-owned subsidiary of Evergrande.
Police in southern China announced that they had detained some employees of Evergrande Financial Wealth Management, an indirect wholly owned subsidiary of Evergrande.
Evergrande postponed planning meetings originally scheduled for September 25 and September 26, citing the need to reevaluate the terms of the restructuring plan.
Evergrande said it could not qualify for the new bond issue because its main land division, Hengda Real Estate Group, is under investigation by China’s securities regulators for alleged disclosure violations.
Evergrande announced that its founder is being investigated on suspicion of “illegal crimes.”
October 2023
Hong Kong’s High Court has given Evergrande five weeks to finalize an agreement with its creditors, but said the next hearing in December will be the last before a decision on the company’s liquidation will be made. .
November 2023
Evergrande has submitted a last-minute debt restructuring proposal to its offshore creditors ahead of a public hearing, seeking to avoid an imminent liquidation.
December 2023
Evergrande has surprisingly secured another stay of execution from a Hong Kong court, giving the developer more time to finalize a revised offshore debt restructuring plan.
Evergrande’s special bondholder group says it firmly opposes the revised restructuring terms.
January 2024
Evergrande’s new energy vehicle division group announced that vice chairman Liu Yongzhuo has been detained and is under criminal investigation.
Evergrande’s special bondholder group will participate in the liquidation application against the developer.
Evergrande received a liquidation order from a Hong Kong court at a hearing on January 29.
(1 dollar = 7.8201 Hong Kong dollar)
(Reporting by Clare Jim and Xie Yu; Additional reporting by Roxanne Liu and Kane Wu; Editing by Sumeet Chatterjee and Kim Coghill)
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