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Wednesday, December 7, 2022

China’s Evergrande seeks legal advice over HK rural plot

FILE PHOTO: The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

HONG KONG (Reuters) – China Evergrande Group said on Sunday that recievers have been appointed for a plot of undeveloped land in Hong Kong’s rural Yuen Long district, in the latest development to hit the debt-laden developer.

A source with direct knowledge said the creditor is Oaktree. However Evergrande did not mention the name in the statement.

The assets are charged as security for a financing transaction for $520 million advanced to the group in January 2021, Evergrande said in a filing to the Hong Kong stock exchange.

“The company is seeking legal advice to protect the legal rights of the company. At the same time, the company is in active discussions with the lender on resolving the matter with a view of reaching a resolution thereby maximising the return to the group.”

If there is residual value on the assets after the secured obligations have been discharged, Evergrande said it would give priority to offshore affairs.

It said the appointment of receivers for the subsidiaries and the potential sale of the relevant secured assets “would not have material impact on the operations or financial position of the group, nor affect the group’s ongoing debt restructuring exercise.”

Evergrande said on Wednesday it aims to have a preliminary restructuring proposal in place within six months as it scrambles to reassure creditors spooked by defaults since its finances began to unravel last year.

Contacted by Reuters, Oaktree declined to comment.

Reporting by Farah Master and Clare Jim; editing by Barbara Lewis

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