China Evergrande Group, facing a mounting cash crisis and a troubled debt restructuring plan, recently offloaded its luxury superyacht, Event, for approximately $32 million earlier this year, according to undisclosed sources.
The move comes as Evergrande’s offshore bondholders intensify their scrutiny of the company’s offshore assets amid the ongoing debt turmoil and the investigation of its founder, Hui Ka Yan, for suspected “illegal crimes.”
The debt restructuring process hit another hurdle when Evergrande announced its inability to issue new debt due to an investigation into its primary Chinese unit.
This development has raised concerns among analysts and investors that the company might face liquidation if the restructuring is further delayed.
The sale of the 60-meter superyacht, Event, is part of Evergrande’s strategy to divest non-core assets.
While a spokesperson for Evergrande did not respond to Reuters’ request for comment, a third source familiar with the matter confirmed the sale.
With Hui Ka Yan under investigation, questions loom over the future management of Evergrande’s operations and the fate of the offshore debt restructuring plan.
The company is currently the world’s most indebted developer, carrying over $300 billion in total liabilities, which has cast a shadow on both the Chinese economy and global markets since the debt issues surfaced in 2021.
In the wake of a default on its dollar bond in late 2021, Evergrande has been striving to gain creditors’ approval for its proposals to restructure offshore debt amounting to $31.7 billion, encompassing bonds, collateral, and repurchase obligations.
Reuters reported that a significant group of Evergrande’s offshore creditors plans to file a liquidation court petition against the developer if it fails to submit a new debt restructuring plan by the end of October.
This move highlights the urgency of resolving the debt crisis.
Despite its substantial offshore liabilities, Evergrande possesses fewer assets outside of China, and the sale of Event further limits the options available to foreign creditors in any potential liquidation process.
Event, delivered in 2013, had previously received the World Superyacht Award. Although some Chinese media reports estimated its value at $60 million in recent years, it was sold for $32 million.
The proceeds will be directed back to Evergrande, which has already witnessed divestment and seizure of offshore assets due to loan defaults.
In addition to the superyacht, Evergrande had previously sold a Boeing private jet for $100 million in July the previous year, while Gulfstream jets were sold in 2021, raising over $50 million.
Lenders to Evergrande’s Hong Kong headquarters had also taken steps to seize and sell the property valued at HK$8-9 billion.
For foreign bondholders, accessing these offshore assets hinges on legal claims and whether Chairman Hui has pledged them as collateral, complicating the process as Evergrande’s financial woes continue to unravel.