Defaulted Chinese companies face rising risks in court hearings

DISTRESSED Chinese companies are facing a torrent of court hearings in Hong Kong this week, as the risk of liquidation rises for some beleaguered firms.

On Monday (Feb 17), Tianji Holding, a key unit of China Evergrande Group, is in court again to try to stave off a wind-up order. A judge already moved up its hearing date, shortening an earlier respite. Tianji’s hearing comes just over a month after a court ordered the liquidation of another Evergrande unit, in a win for liquidators seeking to recover assets from the world’s most indebted developer.

Also on Monday, an investment arm of HNA Group, the conglomerate once known for its purchases of overseas assets, has another liquidation hearing after getting a short delay to the case last month. The company, HNA Group (International), also faces a separate winding-up petition, which is still pending.

Developer Sino-Ocean Group, meanwhile, has a wind-up hearing on Monday, but will be back in court again on Wednesday to seek approval for its loan debt restructuring. The lenders have largely voted in favour of the plan. Earlier this month, a London judge approved a broader restructuring proposal involving all creditors, likely removing the risk of liquidation.

While Beijing has recently taken steps to bolster confidence in the property market, including its moves to shore up property giant China Vanke, a string of defaulted developers have been ordered to liquidate in recent months. This month alone there are at least four liquidation hearings in Hong Kong including those on Monday, as the pace of litigation quickens. BLOOMBERG