Hong Kong court postpones Evergrande liquidation hearing

The China Evergrande Group liquidation hearing has been postponed as a new debt agreement is sought. reported Reuters citing a decision of the Hong Kong High Court.

The meeting will take place on December 4. The next hearing will be the last before a decision is made to liquidate the company, Judge Linda Chan said. She added that the developer needs to prepare a “concrete” revised restructuring proposal by December or face liquidation of the firm.

Evergrande has been at the center of a crisis in the real estate sector due to high debt since the end of 2021. In September this year, the company’s share price declined several times – on September 18 after the detention of some employees of the asset management division (a drop of 25%), on September 26 after non-payment of bonds (by 8%).

Evergrande said it could not issue new bonds due to an ongoing investigation into its main domestic unit Hengda Real Estate, causing Evergrande’s share price to fall 22% on September 25.

On October 10, shares of the Chinese developer Country Garden were listed on the HKEX exchange fell in price by 10.71% after the company announced non-payment of debt, which amounts to 470 million Hong Kong dollars ($60.1 million). The company also expects that it will not be able to meet all of its debt obligations.

Analysts interviewed by Vedomosti notedthat the continuation of the wave of bankruptcies and defaults in this sector may cause an increase in unemployment and a decrease in citizens’ savings, which will lead to a decline in domestic demand.