China Property Giant China Evergrande Group with $300 Billion Debts & Affiliate Tanji Holdings File for Chapter 15 Bankruptcy Protection in New York, Chapter 15 is Debt Restructuring & Does Not Involve Bankruptcy Petition, Defaulted in 2021 with Offshore Debt of $31.7 Billion & Ongoing Restructuring Talks in Hong Kong, Cayman Islands & BVI
18th August 2023 | Hong Kong
China property giant China Evergrande Group with $300 billion debts and affiliate Tanji Holdings have filed for Chapter 15 Bankruptcy Protection in New York on 17th August 2023 (United States, Chapter 15 is debt restructuring & does not involve bankruptcy petition). China Evergrande had defaulted in 2021 with offshore debt of $31.7 billion and is having ongoing restructuring talks in Hong Kong, Cayman Islands & BVI. China Evergrande Group: “The Company noted relevant reports of the media and wishes to clarify that the Company is pushing forward its offshore debt restructuring as planned. As the Company’s U.S. dollar denominated notes are governed by New York law, the Company has applied to the U.S. Court under Chapter 15 of the United States Code for recognition of the schemes of arrangement under the offshore debt restructuring for Hong Kong and the British Virgin Islands. The application is a normal procedure for the offshore debt restructuring and does not involve bankruptcy petition.” Earlier in July 2023, China Evergrande New Energy Vehicle Group, the listed electric car company of China Evergrande, has resumed trading (29/7/23, HKD 1.24) with $1.7 billion market value after 16 months suspension since 1st April 2022, down from $100 billion market value in 2021 February.
” China Property Giant China Evergrande Group with $300 Billion Debts & Affiliate Tanji Holdings File for Chapter 15 Bankruptcy Protection in New York, Chapter 15 is Debt Restructuring & Does Not Involve Bankruptcy Petition, Defaulted in 2021 with Offshore Debt of $31.7 Billion & Ongoing Restructuring Talks in Hong Kong, Cayman Islands & BVI “
Chapter 15 is a new chapter added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law (“UNCITRAL”) in 1997, and it replaces section 304 of the Bankruptcy Code. Because of the UNCITRAL source for chapter 15, the U.S. interpretation must be coordinated with the interpretation given by other countries that have adopted it as internal law to promote a uniform and coordinated legal regime for cross-border insolvency cases.
The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country. This general purpose is realized through five objectives specified in the statute: (1) to promote cooperation between the United States courts and parties of interest and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases; (2) to establish greater legal certainty for trade and investment; (3) to provide for the fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor; (4) to afford protection and maximization of the value of the debtor’s assets; and (5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. 11 U.S.C. § 1501.
Generally, a chapter 15 case is ancillary to a primary proceeding brought in another country, typically the debtor’s home country. As an alternative, the debtor or a creditor may commence a full chapter 7 or chapter 11 case in the United States if the assets in the United States are sufficiently complex to merit a full-blown domestic bankruptcy case. 11 U.S.C. § 1520(c). In addition, under chapter 15 a U.S. court may authorize a trustee or other entity (including an examiner) to act in a foreign country on behalf of a U.S. bankruptcy estate. 11 U.S.C. § 1505.
China Evergrande New Energy Vehicle Group Resumes Trading with $1.7 Billion Market Value after 16 Months Suspension Since 1st April 2022, Down 98.3% from $100 Billion Market Value in 2021
28th July 2023 – China Evergrande New Energy Vehicle Group, the listed electric car company of one of China’s largest property developer China Evergrande, has resumed trading (29/7/23, HKD 1.24) with $1.7 billion market value after 16 months suspension since 1st April 2022, down from $100 billion market value in 2021 February. China Evergrande is one of the largest property developer in China. Earlier in July 2023, creditors are still unable to sell China Evergrande Group $1.1 billion Hong Kong headquarter after 1 year (China Evergrande Group bought at $1.6 billion in 2015), with the building renamed to YF Life, and 3 of 11 elevators were reported not to be running due to non-payment of maintenance fees. Earlier in June 2023, China Evergrande Wealth (Wealth Management) had failed to repay investors due to shortage of cash in May 2023, issuing a statement to investors on ongoing disposal of assets to repay investors. More info below.
Creditors Unable to Sell China Evergrande Group $1.1 Billion Hong Kong Headquarter after 1 Year, Bought at $1.6 Billion, Renamed to YF Life, 3 of 11 Elevators Were Not Running Due to Non-Payment of Maintenance Fees
21st July 2023 – Creditors are still unable to sell China Evergrande Group $1.1 billion Hong Kong headquarter after 1 year (China Evergrande Group bought at $1.6 billion in 2015), with the building renamed to YF Life, and 3 of 11 elevators were reported not to be running due to non-payment of maintenance fees. Earlier in June 2023, China Evergrande Wealth (Wealth Management) had failed to repay investors due to shortage of cash in May 2023, issuing a statement to investors on ongoing disposal of assets to repay investors. Separately, China Evergrande subsidiary Hengda Real Estate Group is facing 1,426 lawsuits totalling $49 billion (CNY 349.6 billion), with China Evergrande overdue debts totalling around $127 billion (CNY 900 billion). Earlier in 2023 May, China Evergrande Real Estate had been ordered (China Guangzhou court, 12/5/23) to pay $853 million (CNY 6 billion) in compensation to an investor (Hexin Hengju Shenzhen Investment Holding Center) for failing to meet the 4 years restructuring timeline agreement.
China Evergrande Wealth Management Failed to Repay Investors in May 2023 Due to Shortage of Cash, Issues Statement to Investors on Ongoing Disposal of Assets to Repay Investors
2nd June 2023 – China Evergrande Wealth (Wealth Management) had failed to repay investors due to shortage of cash in May 2023, issuing a statement to investors on ongoing disposal of assets to repay investors. Separately, China Evergrande subsidiary Hengda Real Estate Group is facing 1,426 lawsuits totalling $49 billion (CNY 349.6 billion), with China Evergrande overdue debts totalling around $127 billion (CNY 900 billion). Earlier in 2023 May, China Evergrande Real Estate had been ordered (China Guangzhou court, 12/5/23) to pay $853 million (CNY 6 billion) in compensation to an investor (Hexin Hengju Shenzhen Investment Holding Center) for failing to meet the 4 years restructuring timeline agreement.
China Evergrande Subsidiary Hengda Real Estate Group Faces 1,426 Lawsuits Totalling $49 Billion, China Evergrande Overdue Debts Around $127 Billion
2nd June 2023 – China Evergrande subsidiary Hengda Real Estate Group is facing 1,426 lawsuits totalling $49 billion (CNY 349.6 billion), with China Evergrande overdue debts totalling around $127 billion (CNY 900 billion). Earlier in 2023 May, China Evergrande Real Estate had been ordered (China Guangzhou court, 12/5/23) to pay $853 million (CNY 6 billion) in compensation to an investor (Hexin Hengju Shenzhen Investment Holding Center) for failing to meet the 4 years restructuring timeline agreement.
China Evergrande Real Estate Ordered to Pay $853 Million Compensation to Investor for Failing to Meet 4 Years Restructuring Timeline Agreement
19th May 2023 – China Evergrande Real Estate had been ordered (China Guangzhou court, 12/5/23) to pay $853 million (CNY 6 billion) in compensation to an investor (Hexin Hengju Shenzhen Investment Holding Center) for failing to meet the 4 years restructuring timeline agreement. In 2016, Evergrande Real Estate had launched a restructuring program (4 year timeline) for a secondary listing in China Mainland, raising CNY 130 billion including CNY 5 billion from Hexin Hengju Shenzhen Investment Holding Center. As restructuring program is not completed within 4 years, the case was brought to court. In the China court ruling, Evergrande Real Estate will pay Hexin Hengju Shenzhen Investment Holding Center CNY 5 billion (capital) and CNY 1 billion for damages & dividends.
China Evergrande Chairman & Founder Hui Ka Yan Wins Preliminary Majority of Creditors Support, Evergrande with $300 Billion in Liabilities & 200,000 Employees
25th March 2023 – China Evergrande Chairman & founder Hui Ka Yan has won preliminary support from majority of creditors, with China Evergrande Group with an estimated $300 billion in liabilities & 200,000 employees. China Evergrande Group is planning to update Hong Kong court to present the new restructuring terms and target to have the agreement signed by end of March 2023. More info below.
21st January 2023 – China Evergrande Chairman & founder Hui Ka Yan fortune had fell from $42 billion in 2017 to $3 billion in 2023 (Bloomberg), with Evergrande struggling to restructure $300 billion in liabilities. Earlier in 2023 January, China Evergrande Group $1.1 billion Hong Kong headquarter tender sale failed to meet creditors price requirement of around $1 billion to $1.15 billion (Address: 38 Gloucester Rd, Wan Chai, Hong Kong). China Evergrande is one of China’s largest property developer and has more than $300 billion in debts. In November 2022, China Construction Bank had seized China Evergrande Chairman Hui Ka Yan $90 million (HKD 700 million) luxury mansion in Hong Kong (The Peak), with Citic taking over China Evergrande Hong Kong headquarter in September 2022 and Oaktree Capital Management taking over China Evergrande Yuen Long district land earlier in 2022. Earlier in October 2022, China Evergrande founder & billionaire Hui Ka Yan has put on sale London most expensive house for £200 million, having just bought the house 2 years ago in 2020 April for £210 Million. The £200 million house in London is a 20-bedroom 62,000 square feet mega-mansion in the prestigious Knightsbridge neighbourhood (London). More info below
China Evergrande Group $1.1 Billion Hong Kong HQ Tender Sale Fails to Meet Creditors Price Requirement, Group Debts of More than $300 Billion
5th January 2023 – China Evergrande Group $1.1 billion Hong Kong headquarter tender sale has failed to meet creditors price requirement of around $1 billion to $1.15 billion (Address: 38 Gloucester Rd, Wan Chai, Hong Kong). China Evergrande is one of China’s largest property developer and has more than $300 billion in debts. In November 2022, China Construction Bank had seized China Evergrande Chairman Hui Ka Yan $90 million (HKD 700 million) luxury mansion in Hong Kong (The Peak), with Citic taking over China Evergrande Hong Kong headquarter in September 2022 and Oaktree Capital Management taking over China Evergrande Yuen Long district land earlier in 2022. Earlier in October 2022, China Evergrande founder & billionaire Hui Ka Yan has put on sale London most expensive house for £200 million, having just bought the house 2 years ago in 2020 April for £210 Million. The £200 million house in London is a 20-bedroom 62,000 square feet mega-mansion in the prestigious Knightsbridge neighbourhood (London).
China Construction Bank Seizes China Evergrande Chairman Hui Ka Yan $90 Million Luxury Mansion in Hong Kong, Citic Took HK Headquarters & Oaktree Capital Took Yuen Long Land
3rd November 2022 |- China Construction Bank had seized China Evergrande Chairman Hui Ka Yan $90 million (HKD 700 million) luxury mansion in Hong Kong (The Peak), with Citic taking over China Evergrande Hong Kong headquarter in September 2022 and Oaktree Capital Management taking over China Evergrande Yuen Long district land earlier in 2022. China Evergrande is one of China’s largest property developer and has more than $300 billion in debts. Earlier in October 2022, China Evergrande founder & billionaire Hui Ka Yan has put on sale London most expensive house for £200 million, having just bought the house 2 years ago in 2020 April for £210 Million. The £200 million house in London is a 20-bedroom 62,000 square feet mega-mansion in the prestigious Knightsbridge neighbourhood (London).
In late 2021, China Evergrande founder Hui Ya Kun had been pledging and selling $1.1 billion of his personal & company assets including 2 Gulfstream private jets, 2 Hong Kong luxury properties and personal investment portfolio to prevent a default of interest payment of its $300 billion debt. The 2 Gulfstream private jets were sold to American investors, one to Earth Air for $40 million and another one to Aviation Sales Associates for $15 million. China Evergrande is founded in 1996 by Hui Ka Yan (Xu Jiayin). In 2009, China Evergrande went public in Hong Kong. At one point, Hui Ka Yan had a personal fortune of more than $30 billion. In 2021, his personal fortune is estimated at around $7 billion to $11 billion.
Banks Seized $2.1 Billion of Bank Guarantees at China Evergrande Property Services
Earlier in 2022, China Evergrande, had forced its CEO Xia Haijun and CFO Pan Darong to resign (22/7/22) after discovery of $2 billion of deposits (CNY 13.4 billion) pledged as securities were used to obtain bank loans. With some borrowers unable to pay back, the $2 billion of deposits may be in full default. Mr. Siu Shawn, who is currently an executive director, has been appointed as the CEO.
In March 2022, Banks had seized $2.1 billion of bank guarantees & deposits at Evergrande Property Services Group, a key subsidiary of China Evergrande. China Evergrande Group have also announced that it is unable to meet a deadline to release its annual results for financial year 2021. China Evergrande is one of the largest property conglomerate in China, which had been preventing a default of interest payment of its $300 billion debt, but has officially defaulted on its debt on missed interest payments and with top credit rating agency Fitch Ratings downgrading Evergrande’s rating in December 2021. China Evergrande is founded in 1996 by Hui Ka Yan (Xu Jiayin). In 2009, China Evergrande went public in Hong Kong. At one point, Hui Ka Yan had a personal fortune of more than $30 billion. In 2021, his personal fortune is estimated at around $7 billion to $11 billion.
China Evergrande
China Evergrande, one of the largest property conglomerate in China which had been preventing a default of interest payment of its $300 billion debt, has officially defaulted on its debt on missed interest payments and with top credit rating agency Fitch Ratings downgrading Evergrande’s rating in December 2021. An official default of China Evergrande means the company may not be able to restructure debt at a lower cost, and may trigger a widespread default and short-term pressure of property prices due to asset sale. China Evergrande is founded in 1996 by Hui Ka Yan (Xu Jiayin). In 2009, China Evergrande went public in Hong Kong. At one point, Hui Ka Yan had a personal fortune of more than $30 billion. In 2021, his personal fortune is estimated at around $7 billion to $11 billion.
China Evergrande is one of the largest property conglomerate in China with more than 1,300 real estate projects & 200,000 employees and business interests in electric cars, healthcare, consumer products etc, and has more than $300 billion of outstanding debts. China Evergrande is suffering from severe cashflow and little working capital, due to significant decline in property sales and obligations on interest payments.
Should China Evergrande defaults, the banking industry may start to face a loan write-down or lengthy recovery on their loans to China Evergrande, suppliers will receive an uncertain recovery, and homebuyers and investors will face uncertainties on their property purchase and investments.
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