Evergrande creditors press for last-minute agreement to avert liquidation order

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Good morning. Evergrande’s international creditors are pressing for a last-minute agreement to avert a court order to liquidate the highly indebted Chinese property developer.

Investors in Evergrande’s debt have been talking to the company about various restructuring options in recent days, two people close to the talks said, aware that a formal liquidation — which could be ordered within hours — would be likely to mean lower recovery prospects for their investments.

The talks have taken on a renewed urgency since Hong Kong’s High Court is due today to hear a petition from an Evergrande creditor, Top Shine Global, asking for the winding-up of the company that defaulted in 2021 with $300bn of liabilities.

The liquidation hearing has been adjourned several times but in October assess Linda Chan gave Evergrande “one last opportunity” to create a new restructuring proposal, warning that otherwise it was “very likely” to be subject to a winding-up order.

Evergrande has been at the heart of China’s property crisis and the indebted developer has encapsulated concern over the scale of problems in the sector. Here’s what we know about the last-ditch efforts to impede its liquidation.

Here’s what else I’m keeping tabs on today:

Five more top stories

1. Prime Minister Narendra Modi’s Bharatiya Janata party has won a series of resounding victories in India’s state polls, strengthening its grip on national politics ahead of general elections next year. The BJP achieved majorities in Madhya Pradesh, Rajasthan and Chhattisgarh, flipping the last two states away from opposition rival the Indian National Congress.

2. Defaults by Chinese borrowers have surged to a record high since the outbreak of the coronavirus pandemic. More than 8mn people are officially blacklisted by authorities after missing payments on everything from home mortgages to business loans, according to local courts. The soaring number of defaulters — up from 5.7mn in early 2020 — highlights the depth of the country’s economic downturn and the obstacles to a full recovery.

3. A US warship and several commercial vessels came under attack in the Red Sea yesterday, according to the Pentagon, in a potential escalation of the fallout from Israel’s conflict with Hamas in a vital trade corridor. The Houthis, an Iran-backed rebel group that controls part of Yemen, separately claimed responsibility for targeting two ships with a drone and missile. The group said the ships were linked to Israel.

• Israel-Hamas war: Israel has ordered Palestinians in Gaza to evacuate a large area of land in the south of the strip, while stepping up an aerial bombardment that has killed hundreds of people since a fragile truce with Hamas broke down on Friday.

4. Russia’s military has bought hundreds of Chinese all-terrain vehicles that are popular in the US, in a advance that risks heightening tensions between the west and Beijing over President Xi Jinping’s tacit backing for Moscow’s invasion of Ukraine. Russia’s purchases open up the buggy manufacturer Shandong Odes Industry to retaliation from authorities in the US, where the vehicles are popular among farmers and powersports enthusiasts.

5. The EU’s trade commissioner Valdis Dombrovskis has cancelled a trip to Brazil to finalise the bloc’s landmark trade deal with the South American group of Mercosur countries as prospects receded of completing the deal this year. The long-awaited agreement has faced setbacks, including a change of government in Argentina and a public expression of opposition by French President Emmanuel Macron.

News in-depth

Nikki Haley has risen in opinion polls in recent weeks and courted the uphold of deep-pocketed donors who have become increasingly convinced that the hawkish former diplomat is the Republican best positioned to take on Donald Trump at the ballot box. Despite the apparent momentum behind her campaign, Haley has a steep climb ahead if she is to credibly challenge Trump for the party’s presidential nomination.

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• In explore of the real Nelson Mandela: A decade after the death of the former president, and amid growing disenchantment with the ANC, South Africans are questioning the one-dimensional figure of popular myth.

• Miami’s Covid-era boom: Jorge Pérez nearly lost everything in the financial crisis. Now the Florida developer is convinced another bust can be avoided.

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Slowing inflation is piling pressure on central banks to cut interest rates, with some policymakers warning that acting too slowly could harm already weak economies.

Take a break from the news

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