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In the nearly one year since September 2023,China Evergrande(03333.HK)'s debt restructuring process is basically suspended and no suitable solution has been found yet.

On the evening of August 9, Evergrande issued an announcement stating that since the appointment of the liquidator and the suspension of trading of shares, the liquidator has focused on investigating the company's business and affairs, and taking measures to maintain and realize Evergrande's assets in order to return value to creditors and other stakeholders, including initiating litigation.

The lawsuit referred to in the announcement was disclosed to the public on August 5. Evergrande is seeking dividends and remuneration totaling approximately US$6 billion in the previous four years from seven defendants, including the company's founder Xu Jiayin and his wife Ding Yumei, former CEO Xia Haijun, and former Chief Financial Officer Pan Dayong.

As of August 9, the above-mentioned litigation is still ongoing and the liquidator will make further announcement on the status of the litigation in due course in accordance with the listing rules.

Although the liquidators have recovered a small amount of value from Evergrande's assets, Evergrande's liquidity and other internal resources remain limited. Considering Evergrande's debt level and the challenges facing its business and operations, in the absence of significant new investment, the liquidators have not yet found a restructuring plan that can enable Evergrande to meet the resumption guidelines and resume trading of its shares.

According to the additional resumption of trading guidance received by Evergrande at the end of July, in addition to the routine completion of all the company's unpublished financial results required by the listing rules, the liquidation order being withdrawn or lifted, and the appointment of any liquidator being lifted, the Hong Kong Stock Exchange also stipulates that there are no reasonable regulatory concerns about the integrity, ability and/or character of Evergrande's management and/or any person who has a significant influence on the company's management and operations.

At the same time, Guangzhou Kailong Real Estate Co., Ltd. (hereinafter referred to as "Kailong Real Estate"), the parent company of China Evergrande, encountered new difficulties.Vanward Electric(002543.SZ) applied for bankruptcy liquidation.

According to Vanhe Electric, there is a 200 million yuan equity repurchase dispute between the company and Kailong Real Estate.

At the end of September 2020, Vanward Electric signed the "Shareholder Agreement on Evergrande Real Estate Group Co., Ltd." with Kailong Real Estate, Evergrande Real Estate and Xu Jiayin. The agreement stated that Vanward Electric invested 200 million yuan in Evergrande Real Estate through Suzhou Industrial Park Ruican Investment Enterprise and indirectly held 0.0641% of Evergrande Real Estate's equity. The "Memorandum" signed on the same day stipulates that from March 1, 2021, the applicant has the right to recover the investment.

When the agreed deadline came, Vanhe Electric decided to recover the investment. However, Kailong Real Estate has not paid the corresponding investment and interest. In September 2021, Vanhe Electric filed an application with the Shenzhen International Arbitration Court, requiring Kailong Real Estate to pay 200 million yuan in investment and corresponding interest.

At the end of 2022, the Shenzhen International Arbitration Court expressed its support for Vanhe Electric's claims, requiring Kailong Real Estate to pay the investment amount and corresponding interest, and the payment must be completed within 15 days from the date of the ruling.

However, Kailong Real Estate has not fulfilled its debts as agreed. Vanward Electric also applied to the court for compulsory execution, and the Guangzhou Intermediate People's Court filed a case for execution on February 14, 2023, but did not collect any money.

Based on this, Vanhe Electric believes that "Kailong Real Estate cannot repay its due debts, its assets are insufficient to repay all debts, and it clearly lacks the ability to repay, and has reasons for bankruptcy." Therefore, in August, Vanhe Electric applied to the Guangzhou Intermediate People's Court to conduct bankruptcy liquidation of Kailong Real Estate in accordance with the law.

On August 9, Vanward Electric received a "Civil Ruling" from the Guangzhou Intermediate People's Court, which ruled to accept the company's bankruptcy liquidation application against Kailong Real Estate, and Kailong Real Estate has entered bankruptcy proceedings. However, as of August 10, the specific plan for the bankruptcy liquidation of Kailong Real Estate has not yet been released, and there is still uncertainty as to whether the investment funds and interest that Kailong Real Estate should pay to Vanward Electric can be recovered in time and the amount of recovery.