The time is set, Evergrande ushered in the "moment of life and death", this time, Xu Jiayin may really have nothing.
Xu Jiayin, the "actor", was still performing until he was arrested. In the more than 20 years of Evergrande's superficial scenery, Xu Jiayin has a responsible and responsible entrepreneur image, saying that he is grateful to the country and society. If the country needs it, Evergrande can be dedicated to the country at any time, and as a result, more than 2 trillion debts and a large number of unfinished buildings have been sacrificed.
After the thunderstorm, Xu Jiayin was still performing, saying that he could have nothing, and Evergrande investors could not have nothing. The result is that the investor really has nothing, but he secretly transferred tens of billions.
However, if you come out to mix, you will have to pay it back sooner or later. Xu Jiayin and his second son were not only arrested, but the Xu family's shares in Evergrande are expected to be cleared.
In the latest news, the High Court of Hong Kong will hold a hearing of the winding-up petition against China Evergrande Group on January 29. Since June 2022, after the creditors filed a winding-up petition against Evergrande, it has been extended 7 times, and this time the time has been set and will not be extended. In other words, next Monday, Evergrande will usher in a "moment of life and death".
If Evergrande wants not to be liquidated, it must come up with a restructuring plan that is acceptable to the court and creditors. However, Evergrande's founder Xu Jiayin and a group of executives were arrested, Evergrande was seriously insolvent, and sales were still bleak. Evergrande's only hope for a turnaround, Evergrande Automobile, is basically out of play.
In view of Evergrande's current situation, what can be done to convince creditors that Evergrande will be able to come back from the dead after the reorganization? Therefore, I expect that it will be very difficult for Evergrande to come up with a convincing plan, and it is very likely that it will go bankrupt and liquidated.
In fact, at the moment when Xu Jiayin was arrested, Evergrande's ending was basically decided. The reason why no action was taken against Xu Jiayin and the executives before was because Evergrande's debts had not been sorted out, there were still many undelivered projects, and many documents still needed to be signed by Xu Jiayin, the founder.
As Evergrande's projects have been taken over by various places, Evergrande's role is actually small, mainly to deal with debt problems. Whether it is restructuring or going bankrupt, it is up to the creditors themselves to decide and follow the market-oriented operation.
The reason why liquidation is very likely is that it is currently restructured offshore debts. Seeing that Evergrande's domestic assets are constantly being executed, overseas creditors might as well liquidate as soon as possible in order to get a little more.
Evergrande's ending has already had previous cases, when HNA had a debt of more than 1 trillion yuan, and at the beginning it was also actively disposing of assets to repay debts, but then the hole was too big to be filled. Subsequently, Chen Feng, the founder of HNA, and a group of executives were arrested one after another. It didn't take long for HNA to go bankrupt and reorganize, and it was bought by Fangda Group.
Although Xu Jiayin has been arrested, he is still the largest shareholder of Evergrande Group. Once it goes bankrupt, Xu Jiayin's shares are likely to be wiped out. Moreover, if it is finally determined that Evergrande has committed financial fraud, Xu Jiayin may also face compensation. Even assets that are transferred abroad may be disposed of.
Looking at the development history of Evergrande, it is constantly borrowing for development, while paying large dividends, and the biggest beneficiary is the Xu family, which has distributed more than 50 billion yuan, and is the founder of the real estate industry with the most dividends. Not only dividends, but also issued high-interest bonds to themselves, the Xu family earned a lot of interest, but the high cost of borrowing was borne by Evergrande. To put it bluntly, the Xu family has been trying their best to hollow out Evergrande.
What successful entrepreneurs, what China's first good, these are all piled up through debt. If Xu Jiayin really runs the business well, he should do what Cao Dewang said "respect God and love people", instead of being ambitious and greedy.
The debt of more than 2 trillion yuan has set a record for the highest debt in the history of China's private enterprises, and it is also the biggest thunder. Evergrande's failure is worth learning from every enterprise.
Again, everything has a cause and effect, and the evil fruit you have planted must be eaten by yourself. I believe that it will not be long before Evergrande will have results.