and Jiayuan International Group. They’re among at least six builders the past several months to receive winding-up petitions, to dissolve a business by liquidating stock, paying off creditors, and distributing any remaining shareholder assets, filed in Hong Kong or the Cayman Islands. Sunac, Jiayuan and China Evergrande Group all have November hearings scheduled for their cases.
“Court filings could either lead to more serious negotiations between creditors and companies and upon agreement the petition can be withdrawn, or a solution could be found through the court process,” according to Ronald Thompson, a managing director at restructuring advisory firm Alvarez & Marsal. Thompson said this week he expects to see more court filings seeking the liquidation of developers as some creditors become increasingly frustrated with a lack of restructuring progress.
A winding-up petition can be filed against a company in Hong Kong court when a creditor is owed at least $10,000,to the Official Receiver’s Office. If the court gives a winding-up order and appoints a provisional liquidator, the latter may take over control of the company, dispose of its realisable assets and distribute any remaining funds to creditors whose claims have been admitted.
Other developers facing winding-up petitions include Yango Justice International, Fantasia Holdings Group and Sinic Holdings Group, according to public information compiled by Bloomberg. Such lawsuits, which may incur extra legal costs for creditors, could add pressure on borrowers to speed up proposing repayment options. Hong Kong’s court website notes parties involved in the Sunac and Jiayuan cases, but no further information was provided about who they are or why the petitions were filed.
Evergrande, the property giant at the centre of China’s property debt crisis, stated this week following a winding-up hearing and two-month adjournment that it aims to deliver a restructuring plan as soon as possible. Sunacit expects to publish its debt restructuring plan within this year as it called the petition against it an “aggressive” move by an individual creditor whose holdings account for an “extremely small” share of the company’s debt.