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China Evergrande (3333) faces a Hong Kong court hearing today over a creditor request to wind up the company, a lawsuit that's lingered for about 18 months.

The developer must convince the judge that it has a concrete debt restructuring plan.

Failure to do so will likely mean liquidation, leading to more chaos in its operations and further denting sentiment in the housing market.

Evergrande, which has liabilities of about US$327 billion (HK$2.55 trillion), is trying to salvage its multi-billion dollar debt overhaul since a slew of setbacks derailed the process in recent months. In the latest twist ahead of the court hearing, a group of offshore creditors is said to be demanding controlling equity stakes in the developer and its two Hong Kong-listed units.

The so-called ad-hoc group of bondholders - which has said it holds more than US$6 billion of the builder's US$19 billion of offshore notes - wants the debt to be swapped for controlling stakes, sources said.

Evergrande earlier proposed offering 17.8 percent of the parent and 30 percent of each of the subsidiaries - Evergrande Property Services Group (6666) and China Evergrande New Energy Vehicle Group (0708).

The developer must prove it has a concrete rescue plan. AP

D-Day arrives for Evergrande