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Dow Jones Newswires: China Evergrande seeks legal advice on Hong Kong residential project

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China Evergrande Group 3333, +1.22% is seeking legal advice after being notified of the appointment of receivers on underdeveloped land in Hong Kong, the latest trouble for the conglomerate seeking to fix its debt problems.

Receivers have been appointed over the assets of some subsidiaries of Evergrande, which were security for financing transactions of about US$520 million last year, the conglomerate said Sunday. It said it was notified of this development on Wednesday.

Evergrande, once China’s largest property developer, defaulted on its debt in December and is struggling to address more than $300 billion in liabilities, including nearly $20 billion in international bonds.

The company had said last week that it aims to release a global restructuring plan within six months that would respect offshore creditors’ legal rights. A group of its bondholders threatened last week to sue the company for failing to engage with them.

Evergrande said Sunday that it was in active discussions with lenders on resolving the matter to reach a resolution.

“Upon the discharge of the secured obligations, if there is residual value on such assets, the company will give priority in using it for offshore affairs,” it said.

Evergande said that appointment of receivers for the subsidiaries and potential sale of the relevant secured assets won’t have a material impact on operations, financial position or its ongoing debt restructuring exercise.

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