Evergrande Faces Liquidation Petition Over Investment Dispute
An investor has filed a petition to a court in China seeking the liquidation of Guangzhou Kailong Real Estate, a major unit of the heavily indebted property developer China Evergrande. The petition, filed by Shenzhen-listed electric appliance manufacturer Vanward, stems from a dispute over a 200 million yuan ($27.9 million) investment.
Vanward claims that Kailong has failed to comply with a December 2022 ruling in Shenzhen that ordered the return of the investment with interest and legal costs. The case is currently under review by a court in Guangzhou.
Kailong is a crucial subsidiary of Evergrande, controlling a 60.3% stake in Hengda Real Estate, Evergrande's flagship property entity in mainland China. This development adds to Evergrande's mounting financial woes.
Earlier this week, Evergrande's electric vehicle unit was ordered by a Chinese court to enter bankruptcy and be reorganized. In January, a Hong Kong court ordered the liquidation of Evergrande after the company failed to present a satisfactory restructuring plan for its $23 billion in offshore debt.
Evergrande's total liabilities exceed $300 billion, raising concerns about the potential impact on China's financial system and the broader economy.