China Evergrande Group has obtained additional time for negotiations with creditors as a Hong Kong court has once again postponed a decision on whether the highly-indebted property developer should undergo liquidation.
Judge Linda Chan, in the city’s High Court, announced the adjournment of proceedings to January 29. The unexpected delay stemmed from the original petitioner’s decision not to advocate for an immediate liquidation on Monday. This abrupt shift in stance caught Evergrande and other creditors off guard, marking the latest twist in a legal battle that has extended for over a year.
On Monday, dozens of individuals queued outside the courtroom, eager to learn the verdict regarding the financial fate of the builder, China Evergrande Group. The judge granted Evergrande an additional eight weeks to negotiate a deal, citing the absence of crucial details in the company’s proposal. The judge recommended that Evergrande seek input from “relevant authorities” and garner broader support from creditors.
The unexpected decision by the original petitioner not to advocate for the company’s immediate liquidation surprised many, including Neil McDonald, a partner at the law firm Kirkland & Ellis LLP, which serves as the legal adviser to an ad-hoc group of creditors. McDonald mentioned that the creditor group had firmly rejected Evergrande’s latest proposal presented to the court. China Evergrande Group
The builder’s shares rallied as much as 22% on the adjournment decision, but pared a bulk of the gains to end the day up 9%. At a value less than HK$0.30, it remains a penny stock. Its bonds have been trading at deeply distressed levels at around one cent on the dollar.