China property crisis: Hong Kong court orders Evergrande, HNA units to liquidate
The Hong Kong High Court ordered Tianji Holding, Evergrande's offshore subsidiary and guarantor, to be wound up, saying that the company was insolvent and needed to be liquidated 'as soon as possible' to protect creditors.
The ruling follows a winding-up order last month for CEG Holdings, another offshore unit of the bankrupt Chinese developer. CEG's creditors and contributories will meet for the first time on Tuesday, according to a notice published in the gazette. A contributory is someone who has a legal obligation to contribute towards the assets of the company in the event it is wound up.
CEG received a winding-up petition in September, as creditors ramped up efforts to recover funds from Evergrande, the world's most indebted developer, which failed under the weight of more than US$300 billion in liabilities. HNA Group (International), the investment arm of HNA Group, was ordered to undergo liquidation on Monday. Photo: Reuters
A liquidity crunch facing mainland Chinese developers could offer little respite as more than 700 billion yuan of bonds mature this year. A total of 13 cases – all related to property bonds – were pending in the courts, according to data compiled by ratings firm S&P Global.
Sunac China Holdings, Shimao Group Holdings and Country Garden Holdings are among the companies that have been confronted with wind-up hearings and fresh liquidation petitions.
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