China Evergrande seeks legal recourse after creditor Oaktree seized indebted developer’s Versailles-like project in Yuen Long

Name: New Evergrande protests amid reports troubled Chinese property giant ordered to raze development
Uploaded: 2022-01-30T15:06:11.000Z
Duration: 1 min 29 s
Description: New Evergrande protests amid reports troubled Chinese property giant ordered to raze development

Evergrande said the asset was charged as a security for a US$520 million loan it entered into in January last year

The indebted mainland developer said it is seeking legal advice to protect its rights over the project, which covers a 2.2 million square feet plot in Yuen Long

Reading Time:2 minutes

Why you can trust SCMP

China Evergrande Group’s plan for a HK$4 billion mansion likened to the Palace of Versailles in Yuen Long, near Hong Kong’s border with Shenzhen. Photo: Handout

Daniel Ren

Published: 11:06pm, 30 Jan 2022Updated: 11:12pm, 30 Jan 2022

China Evergrande Group’s Palace of Versailles-like project in Yuen Long – used as a collateral to restructure part of the company’s massive debt – was recently seized by creditor Oaktree Capital, which has appointed receivers for the asset.

The Shenzhen-based developer, which is saddled with US$310 billion in total liabilities, said it “is seeking legal advice to protect the legal rights of the company”, according to a filing to the Hong Kong stock exchange published on Sunday. It said Oaktree notified the developer about the seizure and appointment of receivers on Wednesday.

“At the same time, the company is in active discussions with the lender on resolving the matter with a view of reaching a resolution,” the Evergrande filing said, without identifying that lender. It said the asset was charged as a security for a US$520 million loan in January last year.

Global asset management firm Oaktree, which rejected Evergrande’s proposed debt restructuring plan, declined to comment.

01:29

New Evergrande protests amid reports troubled Chinese property giant ordered to raze development

Evergrande – controlled by Hui Ka-yan, once China’s richest man – said a potential residual value upon the discharge of the secured obligations involving the Yuen Long asset would be used for its offshore affairs. It said the potential sale of the relevant secured assets had no material impact on the company and its financial position.