EVGPF - Evergrande gets last chance for debt deal to avert liquidation; stock hits record low

2023-10-30 04:49:38 ET

Evergrande's Hong Kong-listed shares hit a record low on Monday after a court pushed a hearing for a winding-up petition to Dec. 4, giving the troubled property developer five weeks to reach a deal with creditors or face liquidation.

The shares dropped ~23% to an all-time low of HK$0.18, before paring losses to end ~10% lower .

The upcoming hearing is expected to be the last before a decision is made on liquidating the firm, Reuters reported .

Evergrande ( OTC:EGRNQ ) told the Hong Kong High Court that it was revising its debt restructuring plan, as its prior plan was no longer valid due to the ongoing investigation of its founder Hui Ka Yan. The probe barred Evergrande ( OTC:EGRNQ ) from issuing new dollar bonds - a key part of the original plan.

Counsel for Evergrande ( OTC:EGRNQ ) told the court it plans to monetize two units - Evergrande Property Services ( OTC:EVGPF ) and Evergrande New Energy Vehicle ( OTC:EVGRF ). Under the revised plan, bondholders can convert their bonds into equity and bonds tied to the two subsidiaries.

The winding-up petition was filed in 2022 by Top Shine, which had invested in Evergrande's ( OTC:EGRNQ ) unit Fangchebao, claiming that Evergrande didn't honor its commitment to buy back shares the investor had bought in the unit.

Evergrande ( OTC:EGRNQ ) has over $300B of liabilities and defaulted on its offshore debt in late 2021, which brought to light the growing real estate crisis in China.

Meanwhile, a winding-up order for another property developer Logan Group ( OTC:LPHHF ) was also pushed to Dec. 4. The cash-strapped company is working on restructuring its offshore debt, although little progress has been made in negotiations with lenders, bondholders told Reuters.

More on China's property crisis

• China's Property Slump Takes Center Stage
• ASHR: Caveats To China's Q3 GDP Outperformance
• Evergrande chairman under police watch, stock drops 19%
• Evergrande seeks Chap. 15 protection in $32B debt restructuring

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