China Evergrande: Hong Kong court adjourns winding-up hearing to December 4, signals last reprieve for developer to sort out its debt

Petition in Hong Kong had earlier been adjourned five times while Evergrande worked out a plan to reorganise US$20 billion of defaulted debt with creditors

Evergrande sought to revise the restructuring deal last month after home sales underwhelmed and its founder Hui Ka-yan was detained

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An Evergrande sign is seen near residential buildings in Beijing in September 2023. Photo: Reuters

Published: 11:05am, 30 Oct 2023Updated: 4:26pm, 30 Oct 2023

A Hong Kong court has adjourned a winding-up hearing against China Evergrande Group, the most indebted property developer in China with US$328 billion of liabilities, signalling a final reprieve for dragging out its restructuring over the past two years.

The next hearing will be on December 4, giving the Guangzhou-based developer five weeks to get its house in order and stave off liquidation, Justice Linda Chan said in a decision today. The High Court judge also warned it is “highly likely” to grant a winding-up order, if no restructuring plan is forthcoming by then.

Justice Chan said the “final adjournment” would give more time for Evergrande to cobble together a deal that would offer higher returns to creditors than in the case of liquidation. She added that the developer had consumed too much time over the past 17 months on its negotiations with creditors.

The stock slipped 9.3 per cent to HK$0.21 on Monday in Hong Kong, after earlier plummeting as much as 23 per cent to a 52-week low of HK$0.182. It has crashed 99 per cent from the peak in 2021, erasing HK$225 billion of its market value.

The winding-up petition was filed in June 2022 by Top Shine Global Limited, an offshore entity which the troubled Chinese developer said was beneficially owned by businessman Lin Ho-man.