(Yicai Global) June 28 -- China Evergrande Group strongly opposes a liquidation petition recently filed by a foreign creditor to the Hong Kong High Court, and the petition is not expected to affect its restructuring plan or timetable, the embattled Chinese developer said today.

Evergrande is in active communication with creditors to promote overseas debt restructuring, the Guangzhou-based developer said. In March the world’s most indebted developer reassured its investors and creditors both at home and abroad that it will publish a debt restructuring plan by the end of July on how it plans to deal with its mountain of debt.

Should the firm be forced into liquidation by the petition, any shares transferred on or after June 24 will be void without a high court recognition order, Evergrande added. The company’s stock was suspended from trading on the Hong Kong bourse on March 21 at Evergrande’s request and the suspension will continue until further notice.

Top Shine Global of Intershore Consult Samoa filed the petition, claiming debts of HKD862.5 million (USD109.9 million), according to a recent announcement on the website of the Hong Kong judiciary, with a preliminary hearing scheduled for Aug. 31.

Creditors and/or company officers can file a winding-up petition if a firm has excess liabilities. If the plea is granted, the court will issue a compulsory winding-up order forcing the business to sell assets to repay debt and distribute remaining property.

But since the assets and businesses of mainland developers are largely in China, offshore winding-up rulings may not be upheld by mainland courts, Bai Wenxi, chief economist at Interpublic Group China, told Yicai Global. So a petition for liquidation is generally aimed at putting pressure on the defaulter to make compromises beneficial to the creditor.

Evergrande has overseas liabilities of around USD21.7 billion, which include USD14.2 billion in overseas bonds, USD5.2 billion in foreign debt held by one of its subsidiaries and USD3.3 billion in placements and project financing, Executive Director Xiao En said earlier this year. The firm is estimated to have total liabilities of over USD300 billion.

Editor: Kim Taylor