If Evergrande Liquidates, What Next?

id5540251 Evergrande logo - The Japan Weeknd Magazine
The lingering Evergrande crisis of over two years may be reaching a tipping point with the world’s most indebted property developer averting a potentially imminent liquidation with a last-minute adjournment of a court hearing to January, giving the property developer time to finalize a revamped debt restructuring proposal.
But even as a deadline relaxes, a restructuring appears unachievable from an accounting standpoint, while liquidation appears imminent, say analysts.
They also add that Evergrande never made profits through its year of inception, and its primary purpose became raising finance to fund its inflating balance sheet and keep the party going.
“[Evergrande’s] problems have built up over a number of years, and the developer has been inflating revenue and profits for years. Consequently, it has an accumulated a loss of close to a trillion yuan. With its huge losses, liabilities exceeding its assets by a very wide margin, and the fact that its creditors will unlikely waive its liabilities, a restructuring is extremely difficult and looks almost impossible,” Nigel Stevenson, an analyst at Hong Kong-based GMT Research told The Epoch Times….

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