The liquidators of China Evergrande Group have taken a significant step in their efforts to recover funds for overseas investors by putting the founder's private jet, an Airbus A319, up for sale. This action is part of a broader strategy to salvage returns for bondholders who have suffered losses since Evergrande's default in 2021.
The liquidators have gained control of the offshore entity that purchased the jet, which is currently located in Guangzhou, southern China. The sale of the jet not only aims to generate cash for investors but also tests the liquidators' ability to enforce asset ownership within China's legal framework.
The liquidation process has faced challenges due to Evergrande's massive liabilities, which exceeded $300 billion at the time of default. The liquidators are also pursuing legal action against Evergrande's executives and professional services firms involved in the company's expansion through foreign funding. They have initiated lawsuits against major players such as PwC, CBRE, and Avista Valuation Advisory to recover substantial sums.
In addition to the jet, court filings have revealed that the founder owns two other private jets, two yachts, and luxury vehicles.
The fallout from Evergrande's default has had a significant impact on investors, including BlackRock and HSBC, who now hold nearly worthless bonds. The ongoing legal battles and asset recovery efforts are crucial for restoring confidence among investors and stakeholders. The liquidators' actions will be closely watched by the financial community, as a successful sale of the private jet could signal progress in the liquidation process and pave the way for further recoveries.
Evergrande's situation has broader implications for China's property sector, raising questions about the sustainability of high-leverage business models and the need for greater transparency and accountability in corporate governance. The outcomes of the legal proceedings may influence future policies and practices in the real estate market.
The liquidation of Evergrande and the sale of the founder's private jet are significant developments that will impact investor confidence and the regulatory environment in China's property market.