Evergrande Liquidation Reveals $45 Billion Debt, Dim prospects for creditors
Hong kong – The ongoing liquidation of Chinese property giant Evergrande has uncovered a debt pile reaching $45 billion – significantly exceeding previous estimates of $27.5 billion disclosed in 2022 – and casts further doubt on the possibility of a comprehensive restructuring, according to liquidators Alvarez & Marsal. The revelation,made in a Hong Kong stock exchange filing earlier this month,underscores the immense challenges facing creditors attempting to recoup losses from the developer’s collapse.
Evergrande’s troubles began in late 2021, triggering widespread concerns about China’s property sector and broader economic stability. After creditors filed a petition, Alvarez & Marsal, the firm known for its role in unwinding Lehman Brothers, was appointed to oversee the liquidation process. Though, progress has been slow, with overseas creditors recovering only a small portion of their investments. The bulk of Evergrande’s assets remain located on the Chinese mainland, hindering access for international claimants.
The company continues to grapple with hundreds of unfinished real estate projects across China, leaving hundreds of thousands of homebuyers awaiting completion of their purchased homes. A long queue of creditors – including suppliers and bondholders – are vying for repayment.
“For Evergrande, home delivery remains the priority,” stated Octus Consulting’s Lu Wenxi. Evergrande reports delivering 1.2 million homes over the past four years, with state media citing a company representative claiming over 95% of sold units have been completed. (Source: https://www.21jingji.com/article/20250822/herald/27662332318f061fd6932a48b3d11967.html)
Despite the focus on home completion, creditors face a bleak outlook. While the offshore entity has been in liquidation as last year,Evergrande’s substantial onshore units are also insolvent,offering limited opportunities for restructuring,Lu added. The Hong Kong liquidators’ recent filing explicitly stated that a “holistic” restructuring is now unattainable. (Source: https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0812/2025081201148.pdf)
Liquidators have managed to sell approximately $255 million in assets as of August 12th, 2025. (Source: https://www.reuters.com/markets/asia/china-evergrande-liquidators-say-255-million-assets-have-been-sold-2025-08-12/)
Analysts predict a substantial loss for overseas investors. ”For overseas investors investing in China through Hong Kong, you have limited recourse to onshore assets if things go bad,” explained Macrolens’ charlene McCarthy. The situation highlights the risks associated with investing in Chinese companies via Hong kong, where access to domestic assets in the event of financial distress is severely restricted. Evergrande was recently delisted from the hong Kong Stock Exchange due to its debt woes.(Source: https://www.nbcnews.com/world/china/china-evergrande-delisted-hong-kong-stock-exchange-debt-woes-rcna224676)
