Evergrande details 900b yuan mountain of liabilities
China Evergrande Group has said its overdue debt, unpaid bills and payments involved in lawsuits have piled up to nearly 900 billion yuan (HK$996 billion), revealing the depth of the liabilities and legal woes the mainland developer faces amid its restructuring struggle.
The company said its overdue debts, excluding onshore and offshore bonds, amounted to around 272.5 billion yuan as of April, according to a Shenzhen Stock Exchange filing on Monday evening concerning its major litigation and failure to repay due debts. Its overdue commercial bills amounted to around 246 billion yuan.
On the legal front, Evergrande is also facing 1,426 unresolved lawsuits involving a total of 349.6 billion yuan as of April, according to the filing.
The developer was named a dishonest debtor in six cases in April by courts around the country for failing to “fulfil the obligations determined by effective legal documents despite its capability”. It was also ordered to pay 2.92 billion yuan in 130 new enforcement notices.
Evergrande’s stakes in some of its subsidiaries and joint-stock companies were also frozen in accordance with 27 court orders.
As of April, Evergrande had completed the transfer of a total of 65 real estate projects via various means including equity transfer, trusts and transfer of land and construction in progress.
Evergrande had revealed some of its legal issues in a May 12 Hong Kong stock exchange filing, which said the company, its Guangzhou subsidiary and its chairman Hui Ka-yan were ordered by the court to make a hefty payment to Hexin Hengju Shenzhen Investment Holding Centre, which had injected 5 billion yuan into Evergrande’s real estate arm.
The payment included 204 million yuan for outstanding dividends from Hengda Real Estate, 51.53 million yuan for liquidated damages, 770 million yuan as compensation for equity interest, and 35.53 million yuan for legal fees.
Meanwhile, Evergrande is waiting to begin its US$19 billion offshore debt restructuring plan, which has so far failed to gain enough support from creditors.
The developer got approval from only 30 per cent of debtors holding Class C debt and over 64 per cent of those holding debt instruments guaranteed by its offshore financing arm Tianji Holding, failing to meet the 75 per cent requirement of the amount owed to each group. It extended the deadline to hit that threshold to May 18, but it has yet to issue an update on the process.