Evergrande to Delist From HKEX as Liquidators Reveal $45B in Debt Claims

China Evergrande shares will cease to trade publicly on the Hong Kong stock exchange later this month, according to the collapsed mainland developer’s liquidators, who revealed Tuesday that the company owes much more to creditors than previously thought — effectively ruling out a “holistic” restructuring of the group.

Evergrande’s creditors have submitted 187 proofs of debt representing $45 billion in claims, the liquidators said in a filing. By contrast, the bankrupt builder disclosed liabilities of $27.5 billion in its last audited financial statements dated 31 December 2022.

The claims are subject to adjudication by the court-appointed liquidators, Tiffany Wong and Edward Middleton of Alvarez & Marsal, and additional claimants could still come forward. The liquidators said they had been made aware of hundreds of creditor actions, almost exclusively against Evergrande’s mainland subsidiaries, including the bankruptcy proceedings of Guangzhou Kailong Real Estate, the parent company of onshore flagship Hengda Real Estate.

“Consequently, at this stage, and consistent with the announcements made by them since their appointment, the liquidators believe that a holistic restructuring will prove out of reach, but they will, of course, explore any credible possibilities in this regard that may present themselves,” Wong and Middleton said in the filing.

$255M Squeezed Out

China Evergrande shares began trading in Hong Kong in October 2009 and have been suspended since January of last year. The stock exchange notified Evergrande last week that the listing committee had decided to cancel the company’s listing due to failure to meet any of the requirements for resumption of trading.

Friday 22 August marks the last day of listing for China’s onetime largest developer, with the cancellation to take effect from 9am on Monday 25 August. The company will not apply for a review of the delisting decision, according to Tuesday’s filing. Upon delisting, the Evergrande share certificates will remain valid but not publicly tradeable.

The liquidators have taken charge of more than 100 firms within Evergrande Group, with those under direct managerial control representing assets valued at $3.5 billion. The exercise has realised $255 million in asset sales, mainly disposals of equity interests in subsidiaries.

The liquidators also continue to pursue legal action against Evergrande’s former auditor Pricewaterhouse Coopers and valuer CBRE, accusing the firms of misrepresenting the builder’s books. PwC’s auditing work has faced scrutiny since a mainland securities regulator found last year that Evergrande had committed fraud by inflating revenue at the Hengda unit by RMB 564 billion (now $78.5 billion) in 2019 and 2020.

Xu Fades From View

Evergrande founder and chairman Xu Jiayin, also known as Hui Ka-yan, has not been seen in public since 2023 and was moved to a special detention centre in Shenzhen last year, sources told Reuters.

In April, Xu notified Hong Kong’s High Court that he planned to refuse disclosing details of his personal assets, as his lawyer pleaded for more time before resumption of the hearing on the “complex” and “sensitive” case.

Bloomberg reported in June that the chairman’s ex-wife, Ding Yumei, spent millions of dollars on luxury London apartments about nine months after Evergrande had defaulted on its loans. The properties worth £49.8 million ($67 million) were acquired in September 2022, according to data compiled by the news agency.