Dodo Finance reports adjourned winding-up hearing for China Evergrande as it pursues new debt agreement

Title: Hong Kong High Court Grants Evergrande a Five-Week Extension for Debt Restructuring, Heightening Global Market Concerns

In a significant development for China’s property giant, Evergrande Group, the Hong Kong High Court has given the company a crucial five-week extension to come up with a debt restructuring plan. The alternative, if the plan fails to materialize, will be liquidation. The court’s decision to adjourn the winding-up hearing until December 4 came with a stern warning that this extension would be the final one before a decision on liquidation is made.

Facing a staggering $300 billion in liabilities, Evergrande has been grappling with a debt crisis that has sparked concerns worldwide. The company’s default on offshore debt in late 2021 has worsened the situation. Furthermore, their $23 billion offshore debt restructuring plan was thrown off course when the founder was confirmed to be under investigation for suspected criminal activities.

The investigation into Evergrande’s founder hindered the restructuring plan, as it led to the company being prohibited from issuing new dollar bonds. This setback prompted Evergrande’s lawyer to unveil an alternative strategy before the court, which involved monetizing the value of its two Hong Kong-listed units.

Over the past two weeks, Evergrande has attempted to engage bondholders with a new restructuring plan. The plan offers bondholders the option to exchange their bonds for equity and bonds linked to two listed subsidiaries. However, the company’s shares plummeted by 9.8% upon news of the adjournment, indicating the market’s unease with the ongoing uncertainty surrounding Evergrande.

It’s worth noting that China’s property sector accounts for about a quarter of the country’s economic activity, making Evergrande’s struggles a cause for global market concern. If Evergrande were to face liquidation, the consequences for capital markets would be significant. However, experts suggest that any impacts on the company’s ongoing operations may not be immediate.

In a similar vein, Logan Group, another prominent property developer, has also been granted an adjournment of its winding-up order until December 4. Similar to Evergrande, Logan Group has been facing liquidity pressure and has suspended interest payments on its offshore debt. Bondholders have expressed concerns about the lack of progress in restructuring talks with offshore creditors.

The convergence of Evergrande and Logan Group’s predicaments has raised concerns about the stability of China’s property sector and its potential repercussions on the global economy. As the situation intensifies, market participants are eagerly awaiting the outcome of the impending debt restructuring plans and their potential ramifications. The next few weeks will be critical for both Evergrande and Logan Group, as their actions could have far-reaching consequences on the capital markets and financial stability.