After nearly two years of failure attempts, final plans, and requests for more time, the giant real estate company China Evergrande has been ordered to liquidate.This is an important moment.Evergrande's collapse in 2021 caused the Chinese real estate market to be troubled.Most families in China put savings in real estate, and people's concerns about real estate have led to the decline in China's economy.
The scale of the Evergrande Empire is huge: it has development projects in hundreds of cities.It controls dozens of enterprises with debt exceeding two trillion yuan -far higher than most people's valuations for their assets.The liquidation of Evergrande made it in the same situation as Bank of America Lehman brothers, and the latter applied for liabilities of $ 600 billion when applying for bankruptcy in 2008.
Evergrande's bankruptcy case will be launched in Hong Kong and mainland China.The courts of these two jurisdictions may determine the winners and losers of the company's creditors.Officials from the Central Government of China may eventually participate.The relevant legal procedures will last for several years, and it must be intricate.
What are the latest progress?
Hong Kong Judge Linda Chan (Linda Chan) ordered the Ongda Consultant Co., Ltd. to liquidate Evergrande Group on Monday and appoint the bankruptcy case.Anmai's role is to help the creditors -especially overseas investors who have provided loans for Evergrande -retrieved some funds.Anmi executives told reporters outside the Hong Kong High Court that they would meet with Evergrande's management to determine the next action.
"Our primary task is to retain, reorganize, or continue to operate Evergrande's business," said Tiffany Wong, managing director of Anmi, who is responsible for Evergrande, said.She also said that Anmi will cooperate with Evergrande's management to allow creditors to get repayment by "trying to reduce interference as much as possible".
In terms of understanding the remaining assets of Evergrande and how to distribute it to the creditors, Anmi needs to cooperate with Evergrande's management.If the liquidation does not go well, Anmi can submit the case to the courts in mainland China.
Hong Kong has long enjoys a semi -autonomous position in China for a long time, different from other parts of China.With the consent of both Hong Kong and the Central Government, the Court of China can recognize the ruling of Hong Kong judges.As far as this case is concerned, the recognition of mainland courts will actually allow Evergrande's foreign creditors to obtain claims on the company's assets.
Who does Evergrande now goes to control?
The simple answer is Anmai. Anmi will replace the board of directors of China Evergrande Group. Evergrande Group is a parent company, managing the core real estate business and many other entities, including an electric vehicle development company.
Another answer is: the Chinese government plays an important role in the whole process.Generally speaking, the Chinese government controls foreign investors in its territory.If the mainland does not want Evergrande's creditors to ask the company's assets in China, the court can prevent creditors.
Anmai can try to take over by replacing Evergrande's legal person in Chinese subsidiaries.However, Evergrande has hundreds of subsidiaries. The local supervision of these subsidiaries, and even employees of the subsidiaries may try to stop taking over.
What is the relationship between Evergrande's destiny with the local government?
The government plays an important role in all aspects of the domestic economy, especially in the real estate field.The staggering slowing down of real estate sales is to restrict the industry's crazy borrowing, because government supervision wants to cool down the crazy increase in real estate.
This has caused dozens of private real estate developers to be eliminated.Many developers have issued debt defaults, Evergrande is the largest one of them.In order to repay debts, developers who needed cash urgently began to make danger decisions, such as selling them before the completion of the apartment building.Now, hundreds of thousands of home buyers have paid the models that have not been built, but the developers of these real estate no longer exist.Someone needs to bear this price.
Evergrande is just a company.For such a large country in China, why is this important?
This is because, for foreign investors in the dilemma, Evergrande's liquidation will become a tasting stone.Evergrande's liquidation is also a test of the judicial system of mainland China and how much it is willing to accept the rule of law in Hong Kong.Over the years, China has always benefited from Hong Kong's position as a global financial center. The predictability of the Hong Kong judicial system has helped establish this position.
The reorganization transactions and liquidation of Chinese real estate companies are relatively new things, involving companies in the world's largest investors, including companies that manage American workers' pension funds.There are dozens of cases similar to Evergrande in Hong Kong courts.
"This crisis shows the universal symptoms of real estate companies and real estate markets," said David Goodman, director of the China Issues Research Center of the University of Sydney."We should care, because the Chinese economy is the key to the world economy, and even a small accident will destroy the stability of the world economy."
