People behind the indebted developer’s overhaul: China Evergrande

Restructuring experts from Alvarez & Marsal will rely on China connections and a track record of complicated corporate overhauls as they try to engineer an outcome for property giant Evergrande that will involve creditors, authorities and home buyers.

Tiffany Wong and Eddie Middleton, both managing directors at A&M, were appointed by a Hong Kong court last month after a liquidation petition was approved following about 18 months of talks with China Evergrande Group’s offshore creditors.

Evergrande, founded in 1996 by Hui Ka Yan, grew to become the poster child of China’s property boom in the first two decades of the 2000s.

But the company, with total liabilities of $300 billion, defaulted on its offshore debt in 2021, and Hui is under investigation for suspected crimes.

Evergrande’s future now sits with Wong and Middleton, who first worked together at KPMG, as they try to either restructure its offshore debt or embark on a more complicated liquidation, a process which is expected to see the involvement of various Chinese authorities.

Beijing has been scrambling to contain the fallout from the debt crisis in the property sector, which accounts for roughly a quarter of the economy, and has made completion of unfinished homes a priority due to worries about social unrest.

Managing the Evergrande overhaul is especially crucial given its scale of operations and debt. Some international distressed debt investors estimate it could take up to 15 years to resolve its complex situation, set to be one of the largest liquidation exercises globally.

“Tiffany is usually the one running the connection onshore,” said a person who has worked with her on liquidation cases, declining to be identified due to the sensitivity of the matter.

“When she runs these things, she’ll immediately identify all the relevant authorities onshore, and she’ll go contact them … Eddie tends to do most of offshore stuff and Tiffany explains the legal stuff onshore, and tries to get the political directives from onshore.”

The duo, and their company A&M, have fostered some good relations with major investors in the region, particularly hedge funds, thanks to their flexible and transparent working style, according to two separate sources who have worked at the firm.

A&M has a team of several dozen staff based in mainland China, said one of the sources, making it one of the few global restructuring firms with a sizeable team onshore and which could facilitate Evergrande liquidation work by Wong and Middleton.