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Investor files liquidation petition in China against Evergrande unit

Published 08/07/2024, 02:42 AM
Updated 08/07/2024, 10:21 AM
© Reuters. FILE PHOTO: A partially removed company logo of China Evergrande Group is seen on the facade of its headquarters in Shenzhen, Guangdong province, China January 10, 2022. REUTERS/David Kirton/File Photo
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By Xie Yu

HONG KONG (Reuters) -An investor has filed a petition to a court in China to liquidate a major unit of heavily indebted property developer China Evergrande (HK:3333), a stock filing by the petitioner showed on Wednesday.

Vanward, a Shenzhen-listed electric appliance manufacturer, cited a dispute with Evergrande unit Guangzhou Kailong Real Estate over an investment worth 200 million yuan ($27.9 million).

A court in the southern Chinese city of Guangzhou is reviewing Vanward's case, the filing said.

Evergrande said in a statement to Reuters a bankruptcy of Kailong would not affect the normal operations of Hengda Real Estate - Evergrande's flagship property entity in mainland China including its completion and delivery of homes to buyers.

Evergrande added Kailong is the holding platform of Hengda and it does not operate any property projects.

Kailong controls a 60.3% stake of Hengda, business registry database Qichacha showed.

Vanward won an arbitrary ruling in Shenzhen in December 2022 that called on Kailong to return the investment with interest accrued and legal costs. Kaikong has yet to comply, Vanward said in its filing.

On Monday, Evergrande's electric vehicle unit said a Chinese court had ruled that two of its subsidiaries must enter bankruptcy and be reorganised.

© Reuters. FILE PHOTO: A partially removed company logo of China Evergrande Group is seen on the facade of its headquarters in Shenzhen, Guangdong province, China January 10, 2022. REUTERS/David Kirton/File Photo

In January, a Hong Kong court ordered Evergrande, once China's largest property developer, to be liquidated after failing to provide a satisfactory restructuring plan for $23 billion in offshore debt.

Overall, Evergrande has more than $300 billion in liabilities.

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