On March 24, China Evergrande issued a voluntary announcement. The company previously disclosed that it had applied to the US court for recognition of the overseas debt restructuring plan in accordance with Chapter 15 of the US Code. The company, Jingcheng and Tianji have applied to the US court to recognize their respective overseas debt restructuring agreements in Hong Kong or the British Virgin Islands.
In view of the appointment of the company's joint and individual liquidators (joint and individual liquidators), it is anticipated that the arrangement will not proceed in the current manner.
According to information, the legal advisors of the company, Jingcheng and Tianji's former foreign representatives submitted documents to the US court on March 22 to withdraw the respective Chapter 15 applications of the company, Jingcheng, and Tianji.
China Evergrande has made it clear that at this stage, all plans are still to be considered, and that joint and individual liquidators will submit new applications under Chapter 15 of the US Code to support the plan they deem necessary or appropriate.
The disposition of China Evergrande's huge debt has always been the focus of market attention.
In March of last year, China Evergrande's overseas debt restructuring broke the ice.
At that time, China Evergrande announced an overseas debt restructuring plan to replace the original bonds by issuing new bonds.
Since then, China Evergrande has also signed three restructuring support agreements with members of the Foreign Creditors Task Force, and the large-scale restructuring of Evergrande's overseas debt has begun based on this.
But soon after, Evergrande Real Estate and Xu Jiayin were successively investigated, and China Evergrande was unable to meet the eligibility to issue new notes, causing the early restructuring plan to run aground. Since then, the new debt restructuring plan has made rare progress.
Recently, Evergrande Real Estate and other relevant entities opened a case and the results of the investigation were initially revealed.
In two years, Evergrande Real Estate's financial fraud inflated revenue by 564 billion yuan and inflated profit by 92 billion yuan. Such huge data made the Evergrande Real Estate fraud case the largest financial fraud case in the world.
Specifically, the administrative penalties and advance market ban notices received by Evergrande Real Estate from the China Securities Regulatory Commission show that there are false records in the 2019 and 2020 annual reports disclosed by Evergrande Real Estate.
Evergrande Real Estate's financial fraud through early revenue recognition resulted in Evergrande Properties' inflated revenue of 213.989 billion yuan in 2019, accounting for 50.14% of current revenue, corresponding inflated cost of 173.267 billion yuan, and inflated profit of 40.722 billion yuan, accounting for 63.31% of total current profit; in 2020, Evergrande Real Estate inflated revenue of 35.157 billion yuan, accounting for 78.54% of current revenue, corresponding inflated cost of 298.88%.
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