Image: APA/AFP/STR
Symbolic of the crisis in the real estate industry is not only the Signa Group, with which the Tyrolean entrepreneur Rene Benko caused the largest bankruptcy in Austria’s economic history to date, but also the China Evergrande group.
The Chinese real estate developer first encountered liquidity problems in September 2021, and the company has been struggling to survive ever since. Now Hong Kong’s Supreme Court has once again granted Evergrande a postponement of the restructuring plan. Judge Linda Chan postponed the decision until January 29, several media outlets reported on Monday.
The property developer from southern China, which is the equivalent of more than 300 billion US dollars (around 275.7 billion euros), is threatened with liquidation. Creditors from abroad had taken the matter to court because the company had already missed payments several times. Chan had already said at the previous negotiation that this was the last postponement and that she would most likely agree to a liquidation if China Evergrande did not find a restructuring plan with the creditors.
Investigations against the founder
According to reports, the lawyers of the Hong Kong-listed group had now promised to reach an agreement with the lenders in the coming weeks. With a liquidation, an insolvency administrator would monetize the company and thus pay off the creditors. Some experts believe that a liquidation would return less money to creditors than a restructuring. According to reports, China Evergrande also argued this in court. The group has wanted to present a restructuring plan since 2022, which has always failed so far. The Chinese authorities are investigating its founder, the once richest Chinese man Hui Ka Yan.
Like many other real estate companies, Evergrande is in crisis because revenues are falling, there is less government support and loan interest rates are rising.
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