BEIJING: A Hong Kong court granted Chinese real estate behemoth Evergrande until the end of January to put together a restructuring plan on Monday ( Dec4 ), giving the troubled company much-needed breathing room as it teeters on the verge of bankruptcy.
The enormous debts of the real estate tycoon has come to represent a protracted crisis in China’s property market.
What we know about the financial situation of Evergrande is as follows:
What is Evergrande’s predicament?
Evergrande estimated that it owed US$ 328 billion in June, the last time it made its payments known to the public.
The business was once the largest real estate company in China, a giant in esoterics as house grew to be the cornerstone of an expanding middle class’s growing prosperity.
However, a protracted housing crisis has wreaked havoc on the existence of consumers all over the nation, many of whom have bet their entire lives ‘ savings on qualities that never materialized.
Evergrande fully defaulted in December 2021 because it was unable to pay attention on its debts.
The party declared bankruptcy in the US in August as a precaution to safeguard its property it.
What are the goals of debts?
According to Bloomberg, the property behemoth is offering 17.8 % of its parent company and 30 % of Evergrande’s property services and electric vehicle groups in exchange for controlling stakes in the equity of the company.
According to Chinese media, the group’s assets have been sold in recent months in an effort to increase liquidity: as of the end of November, they were worth about 50 billion yuan ( US$ 7 billion ).
However, the recovery rate for Evergrande’s lenders was estimated at less than 3 % during a hearing in October, highlighting the mountain creditors ‘ need to climb in order to get their money back.
A Hong Kong judge has instructed Evergrande’s attorneys to seek “more strong discussion with relevant authorities” in order to confirm that the restructuring proposal of the company was doable, and they have until January 29 to develop a comprehensive repayment plan.