Country Garden hires Kroll to carry out liquidation analysis
HONG KONG: Country Garden has hired Kroll to carry out a liquidation analysis ahead of a court hearing in mid-May, according to three sources, as the embattled developer pushes ahead with its offshore debt restructuring plan.
China’s biggest private developer is facing a liquidation petition for non-payment of a US$205 million (RM970 million) loan, with a court hearing in the case set for May 17.
Companies that are restructuring their debt normally conduct an independent liquidation analysis to assess potential recovery rates for creditors that they can present in court, legal experts said.
China Evergrande had picked Deloitte for a liquidation analysis, before a court ordered its winding up in January.
Kroll, the New York-headquartered financial advisory firm, is expected to conduct an independent business review of Country Garden before projecting a recovery rate for the developer’s creditors under a liquidation scenario, according to the three sources who had direct knowledge of the matter.
China’s property sector has lurched from one crisis to another since 2021 after a regulatory crackdown on high leverage among developers triggered a liquidity crisis.
Kroll is in the early stages, and it might take a few months for the creditors to see the results of the analysis, said the three sources.
Country Garden’s US$11 billion of offshore debt was deemed to be in default after it missed a key payment last October.
The developer previously hired KPMG and law firm Sidley Austin as advisers to examine its capital structure and liquidity position and formulate what it called a “holistic” solution for creditors.
The role of Kroll will be separate from that task, according to the sources. – Reuters