Evergrande Risks Liquidation If Creditors Nix Its Debt Plan

A Hong Kong court will convene a hearing today regarding troubled Chinese property developer Evergrande’s plans to restructure its more than $300 billion in debts and stave off liquidation, as reported by Zen Soo for the Associated Press (AP).

In September, Evergrande abandoned its initial debt restructuring plan after authorities banned it from issuing new dollar bonds, a key part of its plan. I Photo: Dinkun Chen Wikimedia Commons

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.

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

The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times.

Judge Linda Chan stated in October that Monday’s hearing would be the last before a decision is handed down. Evergrande could face liquidation if the plan is rejected by its creditors. In September, Evergrande abandoned its initial debt restructuring plan after authorities banned it from issuing new dollar bonds, a key part of its plan.

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