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. 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. Los Angeles-based Oaktree’s seizure of the Yuen Long project marks one of the most significant actions taken by an international financial institution against Evergrande, which became the world’s most indebted property developer after its loan repayment issues started to mount last year. That move came after Evergrande asked its offshore creditors last week to refrain from taking hostile enforcement actions to recover their debt, as the developer makes “unremitting efforts” to restructure its liabilities. The embattled mainland developer told these creditors that it needed more time to evaluate the number of potential solutions before it can further engage in substantive negotiations with them, according to the firm’s stock exchange filing last week. Evergrande asks creditors to avoid legal actions while it works out debt Evergrande had been looking for a buyer for that project, which covers a 2.2 million square feet plot in Yuen Long, a location that falls under the Hong Kong government’s planned Northern Metropolis . The embattled mainland developer has already invested a total of nearly HK$8.9 billion (US$1.1 billion) on the project, according to a Sing Tao Daily report in August last year. The firm bought the farmland, located near the Mai Po Wetlands, from Henderson Land for HK$4.7 billion in 2019 and paid almost HK$4.2 billion last year to convert it to residential use. It planned to build a 240,000 sq ft villa “like the Palace of Versailles” on the land. The project will have a total of 268 villas, each built up two or three storeys, according to documents submitted to Hong Kong’s Town Planning Board.