By Xie Yu
HONG KONG (Reuters) -An investor has filed a petition in a Chinese court to liquidate a major onshore unit of heavily indebted property developer China Evergrande, a stock filing by the petitioner showed on Wednesday.
Vanward, a Shenzhen-listed electric appliance manufacturer, cited a dispute with Evergrande unit Guangzhou Kailong Real Estate over an investment worth 200 million yuan ($27.9 million).
A court in the southern Chinese city of Guangzhou is reviewing Vanward’s case, the filing said.
Vanward won an arbitrary ruling in Shenzhen in December 2022 that called on Kailong to return the investment with interest accrued and legal costs. Kailong has yet to comply, Vanward said in its filing.
The petition comes after a Hong Kong court in January ordered China Evergrande, the offshore holding company of the onshore units, to be liquidated after failing to provide a satisfactory restructuring plan for $23 billion in offshore debt. A Hong Kong liquidation order, however, is not automatically recognised in mainland China.
A spokesperson for the liquidators of Evergrande declined to comment on the petition.
Evergrande said in a statement to Reuters a bankruptcy of Kailong would not affect the normal operations of Hengda Real Estate – Evergrande’s flagship property entity in mainland China – including its completion and delivery of homes to buyers.
Evergrande said Kailong is the holding platform of Hengda and it does not operate any property projects. Kailong controls a 60.3% stake in Hengda, business registry database Qichacha shows.
On Monday, Evergrande’s electric vehicle unit said a Chinese court had ruled that two of its subsidiaries must enter bankruptcy and be reorganised.
Evergrande was once China’s largest property developer and has more than $300 billion in liabilities.
(Reporting by Xie Yu; Additional reporting by Clare Jim; editing by Neil Fullick, Christopher Cushing and Jason Neely)
