Distressed Chinese developer Country Garden downplays hiring New York-based Kroll for liquidation analysis
- ‘Hiring an independent third party to perform a hypothetical liquidation analysis has no direct connection to an actual liquidation,’ company says
- The analysis aims to show creditors and the court that a restructuring is more beneficial to stakeholders, Country Garden says
Embattled Chinese property developer Country Garden Holdings downplayed the possibility of a liquidation after it hired a financial advisory firm to assess the amount of money creditors could recover in such an event.
“Hiring an independent third party to perform a hypothetical liquidation analysis has no direct connection to an actual liquidation,” Country Garden said in a note to the Post on Wednesday. “The analysis is an important component of documents that need to be submitted to the court as a part of a debt restructuring process, and it is highly common in restructuring cases in recent years.”
The developer, based in Foshan in China’s southern Guangdong province, hired New York-based Kroll to perform a liquidation analysis, after Ever Credit, a wholly owned unit of Kingboard Holdings filed a winding-up petition against Country Garden in late February due to non-repayment of a term loan worth about US$204 million. A court hearing is scheduled for May 17.
“The liquidation analysis is intended to show creditors and the court that a restructuring is more beneficial to stakeholders,” Country Garden said, adding that a reliable, professional third party can help stakeholders assess the rate of recovery in the event of a liquidation, as well as help the developer make better decisions as it proceeds with its restructuring process.
