*

Evergrande liquidators realise $255 million in assets

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Shares to be delisted from Hong Kong after trading

suspension

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Liquidators face complex asset ownership structures, $45

billion

debt claims submitted

(Adds more details from filing in paragraph 2, 14-21, context

in paragraph 4,5, background in paragraph 8,22)

By Clare Jim and Scott Murdoch

HONG KONG, Aug 12 (Reuters) - Liquidators of China

Evergrande Group ( EGRNF ) said on Tuesday they have sold about $255

million of its assets 18 months into China's largest debt

liquidation process and taken control of more than 100 of the

company's subsidiaries.

They have received creditor claims totalling $45

billion, the liquidators said in a filing, significantly higher

than liabilities of $27.5 billion in 2022 in the last

disclosure.

The liquidation of the world's most indebted property

developer has proved challenging as the majority of Evergrande's

units and assets are onshore and many of them have been seized

by creditors.

Given the scale and complexity of the company, Evergrande's

liquidation could take more than a decade to be completed,

according to offshore investors.

While the pace of asset disposals for debt recovery was

faster than market expectations, the value was still far below

the creditors' claims.

The developer's shares will be delisted from the

Hong Kong Stock Exchange on August 25 after they failed to

resume trading per listing rules, the filing said.

Shares of Evergrande, once China's top developer which was

listed in Hong Kong in 2009, are facing delisting after having

been suspended from trading since January 29, 2024, the day the

company received a liquidation order from the Hong Kong High

Court.

The liquidation order came after Evergrande failed to

provide a viable restructuring plan for its $23 billion offshore

debt amid a debt crisis in the Chinese property sector that

erupted in mid-2021. The company collapsed with more than $300

billion in liabilities.

Many property companies across the country have defaulted

since, and China's property market, once a key growth driver for

the world's second-largest economy, has been in a multi-year

tailspin despite repeated government attempts to revive weak

consumer demand.

Developers face deteriorating cash flow but their

bondholders are resisting taking heftier losses on their

investments, delaying negotiations between companies and

creditors, restructuring advisers have said.

PROGRESS REPORT

In a progress report published on Tuesday, Evergrande's

liquidators, Alvarez & Marsal's Edward Middleton and Tiffany

Wong, said entities now under the liquidators' direct management

control had a total value of $3.5 billion at the time of the

liquidation order.

Of the $255 million worth of asset sales, however, only $11

million came from assets held directly by Evergrande, while the

rest were held by its subsidiaries.

The liquidators cautioned it should also not be assumed that

the $244 million derived from assets held by Evergrande's units

will all be available to it. Only $167 million has been

delivered so far.

"The ownership structures of these assets are in most cases

multi-layered, involve corporate entities incorporated in more

than one jurisdiction, have voluminous and complex intra-group

transactions within them and, in some cases, have external

creditors," the liquidators added in the filing.

"All of this makes the upstream distribution of the

proceeds of realisation of an asset a painstaking and

time-consuming exercise."

The total proceeds raised include the sales of a variety

of non-core assets, such as equity interests in the futures and

securities brokerage businesses, school bonds, club memberships,

artwork and motor vehicles.

As of July 31, creditors had submitted 187 debt claims

totalling $45 billion, according to the filing. The figure

compares to liabilities of $27.5 billion disclosed in the

company's last financial statements for 2022.

The liquidators warned, though, that the figure could

change and would be assessed to ensure duplicate or misleading

claims had not been made.

Evergrande's two most valuable assets are its shares in

listed units Evergrande Property Services ( EVGPF ) and

Evergrande New Energy Vehicle, and the liquidators

have been looking for buyers for them.

For the property services unit, in particular, the

liquidators said they have appointed legal and financial

advisers to assist them in the process.

As there is no clear path to a viable and more

encompassing restructuring, the liquidators said they will

continue to focus efforts on realising assets and investigating

the causes of insolvency and possible claims arising from them.

The liquidators have taken

legal action

against PricewaterhouseCoopers, accusing it of "negligence"

and "misrepresentation" in its work for the group. They are also

suing property services company CBRE ( CBRE ) and investment banking

advisory firm Avista ( AVA ) over valuation reports they produced for

Evergrande and its subsidiaries in 2018.