Hong Kong’s Supreme Court has once again granted the highly indebted Chinese real estate giant Evergrande a postponement for its reorganization plan.
Judge Linda Chan surprisingly postponed the decision until Jan. 29, the South China Morning Post reported on Monday.
The property developer, which has liabilities estimated at more than 300 billion dollars, is threatened with liquidation.
However, creditors from abroad had taken the company to court because of its missing several payments.
Chan had already said at the previous hearing that this would be the last postponement and that she would very likely agree to liquidation if China Evergrande did not find a plan for restructuring with its creditors.
According to reports, however, the lawyers of the Hong Kong-listed group had now held out the prospect of being able to reach an agreement with the lenders in the coming weeks.
In the case of liquidation, an insolvency administrator would monetize the company and pay out the creditors.
Meanwhile, some experts were of the opinion that liquidation would return less money to creditors than a reorganization, China Evergrande argued the same in court, according to reports.
The group had been trying to submit a restructuring plan since 2022, without success. Its founder and once China’s richest man, Hui Ka Yan, is being investigated by the Chinese authorities.
Like many other property groups, the company had been in a serious crisis for some time because it is earning significantly less on the slumping property market.
The company is finding it more difficult to obtain state support and is no longer able to service its loans.
“The Evergrande case also shows that the era of large private property developers in China is coming to an end,’’ says Max Zenglein from the Merics China Institute in Berlin.
If Chan decides to wind up China Evergrande, this could also have an impact on other companies.
“One challenge for the government will be to prevent domino effects in the economy caused by major bankruptcies,’’ says Zenglein.
