By HUANG Yu
A winding-up petition against China Evergrande has been filed with the Hong Kong High Court, which, if approved, will trigger forced liquidation.
Evergrande said in a stock filing that it would vigorously fight the petition. The case involves HK$862.5 million (US$110 million) of Evergrande’s more than US$300 billion liabilities.
The petition presumably will not affect the restructuring of its offshore debt. A total of US$22.7 billion worth of offshore debt is deemed in default, and a preliminary restructuring plan is expected in July.
But if Evergrande is wound up, any decision it makes on its own assets or shares after the filing would be void unless the court grants a validation order.
The creditor who filed the petition is Top Shine Global, one of 17 investors who participated in a deal involving Fangchebao (FCB), an online real estate and automobile marketplace that Evergrande launched in 2020.
Evergrande sold 10 percent of FCB shares to 17 investors in March 2021 for HK$16.35 billion.
The agreement allowed them to sell the shares back to Evergrande at a 15 percent premium if an IPO didn’t happen by April 2022. Top Shine Global put in HK$750 million, but Evergrande failed to take FCB public and has been unable to honor the buy-back agreement.
In total, Top Shine Global holds less than 1 percent of Evergrande’s offshore debt, Evergrande Executive Director Xiao En told business news outlet 21st Century Business Herald.
Evergrande has tried to resolve the matter privately with Top Shine Global, and Xiao said the company would “spare no effort” to ensure normal business operations, including debt restructuring.
