Tuesday, April 16, 2024

Tracking the timeline of China Evergrande’s debt crisis

Timeline: China Evergrande's worsening debt crisis
A woman rides a scooter past residential buildings at an Evergrande residential complex in Beijing, China on Sep 27, 2023. (File photo: Reuters/Florence Lo)

A Hong Kong court ordered the liquidation of China Evergrande Group on Monday (Jan 29).

Evergrande is the world’s most indebted real estate developer and has been at the centre of an unprecedented liquidity crisis in China’s property sector, which accounts for roughly a quarter of the world’s second-largest economy.

Once China’s top-selling developer, Evergrande’s financial crisis became public in 2021 and since then it and a string of its peers have defaulted on their offshore debt obligations amid slowing home sales and fewer new avenues for fundraising, triggering fears of wider contagion that could spread to the country’s banks.

Here is a timeline of how Evergrande’s debt crisis has unfolded:

August 2021

Many Evergrande projects across the country halt construction due to overdue payments.

China’s central bank and banking watchdog summon senior executives and issue a rare warning that Evergrande must reduce its debt risks and prioritise stability.

September 2021

It misses two offshore bond coupon payments totalling US$131 million. The payments have a grace period of 30 days.

Evergrande engages financial advisers to examine options, warning of cross-default risks amid plunging property sales.

November 2021

Founder Hui Ka Yan sells 1.2 billion shares worth HK$2.68 billion (US$342.7 million), lowering his stake in Evergrande to 67.9 per cent from 77 per cent.

March 2022

Evergrande suspends trading in its shares, citing its inability to publish audited results before March 31, and an investigation of the property management arm in which 13.4 billion yuan of deposits were seized by banks.

November 2022

A mansion belonging to Evergrande’s chairman in Hong Kong’s prestigious The Peak residential enclave is seized by lender China Construction Bank (Asia).

December 2022

Evergrande says it has resumed work on 631 pre-sold and undelivered projects.

Hong Kong court orders China Evergrande to liquidate with debts of US$300 billion
What happens next after Hong Kong court orders China Evergrande to liquidate

January 2023

Evergrande says its then auditor PricewaterhouseCoopers resigned amid disagreements over matters relating to the audit of its 2021 accounts.

February 2023

An independent committee finds Evergrande’s directors fell “below standards” through their involvement in diverting loans secured by unit Evergrande Property Services to the group.

March 2023

Evergrande announces plans for the restructuring of its offshore debt, giving creditors a basket of options to swap their debt into new bonds and equity-linked instruments backed by the group and its two Hong Kong-listed companies.

April 2023

Evergrande says 77 per cent of the holders of class-A debts and 30 per cent of the holders of class-C debts have submitted their support for the restructuring proposal.

July 2023

Evergrande posts a net loss of 476 billion yuan and 105.9 billion yuan for 2021 and 2022, respectively, versus a net profit of 8.1 billion yuan in 2020 when its operation was normal.

Related:

Evergrande proposes offshore creditors get 30% equity stake in subsidiaries: Sources
CNA Explains: With another Chinese property giant in crisis, how worried should the world be? 

August 2023

Evergrande says it plans to seek protection under Chapter 15 of the US bankruptcy code, which shields non-US companies that are undergoing restructurings from creditors that hope to sue them or tie up assets in the US.

Evergrande reports a 33 billion yuan loss in January-June, versus a 66.4 billion yuan loss in the same period last year.

Trading in Evergrande’s shares resumes after 17 months, with 79 per cent of its market value lost from when it was last traded.

September 2023

China’s National Administration of Financial Regulation approves the setup of a state-owned insurer to take over all of assets and liabilities of Evergrande Life Insurance, a 50 per cent-owned investee company of Evergrande.

Police in southern China say they have detained some staff at Evergrande Financial Wealth Management, an indirect wholly-owned subsidiary of Evergrande.

Evergrande defers scheme meeting initially scheduled on Sep 25 and Sep 26, citing needs to reassess the terms of proposed restructuring.

Evergrande says it is unable to meet qualifications for the issuance of new notes as its flagship onshore unit Hengda Real Estate Group was being probed by the Chinese securities regulator for suspected violation of information disclosure.

Evergrande says founder is being investigated over suspected “illegal crimes”.

China’s Evergrande says head of EV arm detained

October 2023

The Hong Kong High Court gives Evergrande a five-week reprieve to come up deal with creditors, but says the next hearing in December will be the last before a decision is made on liquidating the company.

November 2023

Evergrande makes last-minute revised debt restructuring proposal to offshore creditors ahead of the hearing, seeking to avert a potentially imminent liquidation.

December 2023

Evergrande surprisingly obtained another adjournment from the Hong Kong court, giving the developer more time to finalise a revamped offshore debt-restructuring plan.

Evergrande’s ad hoc bondholder group says it firmly opposes the revised restructuring terms.

January 2024

Evergrande’s new energy vehicle unit Group says its vice chairman Liu Yongzhuo has been detained and is under criminal investigation.

Evergrande’s ad hoc bondholder group joins the liquidation petition against the developer.

Evergrande was issued a liquidation order by a Hong Kong court at a Jan 29 hearing.

Source: https://www.channelnewsasia.com/business/china-evergrande-group-liquidation-property-real-estate-timeline-4081721

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