Court provides final opportunity for Evergrande to reach debt agreement

The Hong Kong High Court judge has granted Evergrande, the troubled Chinese property giant, one final opportunity to present a new proposal for its massive debts, warning that failure to do so could lead to liquidation. The winding-up hearing, originally set for Monday, has been postponed until 4 December. Justice Linda Chan emphasized that this would be the last hearing before a decision is made. Evergrande, which has over $325bn of total liabilities, defaulted on its debts two years ago and has been working on a repayment plan since then. Justice Chan emphasized the need for a specific proposal, stating that if Evergrande fails to provide one, liquidation is likely. She added that a liquidator could still negotiate with creditors. Evergrande did not immediately respond to a request for comment from the BBC. The case was initially filed in June 2022 by Top Shine Global, an investor in Evergrande unit Fangchebao, alleging that Evergrande had breached an agreement to repurchase shares bought by the investor. Evergrande's efforts to restructure its debts suffered a setback last month when its founder and one of its main subsidiaries became subjects of an investigation into suspected criminal activities. The company also mentioned that it was prohibited by Chinese regulators from issuing new dollar bonds, which were a critical part of its debt restructuring plan. It additionally cancelled the scheduled creditor votes on its restructuring proposal. Most of Evergrande's debt is owed to individuals within China, including ordinary citizens whose homes remained unfinished. The default of the company's massive debts in 2021 sent shockwaves through global financial markets, as the property sector contributes to around a quarter of China's economy. Numerous other major developers in the country have also defaulted over the past year, with many struggling to secure funds to complete their projects.