China Evergrande Group, the troubled real estate developer facing a massive debt crisis, has sold its luxury superyacht, Event, for $32 million, as part of its efforts to sell down non-core assets and address its cash crunch. The sale of the superyacht further reduces Evergrande’s offshore assets, at a time when the company is facing a debt restructuring plan and an investigation into its founder.
The sale of Event has raised concerns among Evergrande’s offshore bondholders, who are expected to focus on Evergrande’s offshore assets as the debt restructuring plan faces challenges. With the sale of the superyacht, foreign creditors will have fewer options in the event of a potential liquidation process.
Event, registered in Evergrande’s name, was worth an estimated $60 million and had even received the prestigious World Superyacht Award in 2014. Its sale follows the divestment or seizure of some of Evergrande’s offshore assets by lenders.
The financial woes of Evergrande, with total liabilities exceeding $300 billion, have not only had a severe impact on the Chinese economy but also on global markets. The company has been desperately seeking creditors’ approval for a restructuring plan to address its whopping $31.7 billion offshore debt.
However, a major Evergrande offshore creditor group has announced plans to join a liquidation court petition if the company fails to submit a new debt revamp plan by the end of October. The sale of Event further complicates the debt restructuring process and raises the risk of liquidation for Evergrande.
In light of these developments, creditors will now need to establish whether the remaining offshore assets of Evergrande and its founder have already been used as collateral for raising funds. This adds another layer of complexity to the already challenging debt restructuring process.
The sale of Event serves as a stark reminder of Evergrande’s desperate attempts to raise funds and alleviate its financial burden. As the company continues to grapple with its debt crisis, the fate of its offshore assets remains uncertain, leaving creditors and investors on edge.
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