Chinese real estate giant, Evergrande, was placed in liquidation by a court on Monday after failing to present a credible restructuring plan. The promoter’s shares fell by more than 20% after the announcement.
Published on:
2 minutes
Evergrande is a symbol of the upheaval of the real estate sector in China. On Monday 29 January, a Hong Kong court ordered the liquidation of the group.
Evergrande was China’s biggest real estate developer, but has piled up debt until it has more than $300 billion in liabilities, a symbol of the years-long real estate crisis in the world’s second-largest economy.
“(Considering) the apparent lack of progress on the part of the company in presenting a viable reorganization plan. (…) I find it appropriate for the court to order the liquidation of the company, and that is what I order. Judge Linda Chan said.
A judge is expected to issue details of his ruling this afternoon and may appoint a liquidator for Evergrande.
However, it was not immediately clear how the decision made in the semi-autonomous Chinese region of Hong Kong might materialize in mainland China, where the group is based.
“Today’s court decision is contrary to our original intention (…) It is extremely regrettable,” Evergrande CEO Sean Siu told Chinese business media 21st Century Business Herald.
Also readEvergrande: The Journey of Zhu Jiayin, or the Overwhelmed Chinese Real Estate Tycoon
Shares of Chinese real estate giant Evergrande fell more than 20% after the announcement of its liquidation on the Hong Kong stock exchange, which suspended trading in the stock.
“(…) Trading in the securities of Evergrande Property Services Group Limited was suspended at 10:19 a.m. local time (2:19 am GMT), the Hong Kong Stock Exchange indicated, which also suspended the listing of its subsidiary Evergrande NEV Electric vehicles.
A creditor filed a liquidation petition against the developer in a Hong Kong court last year, but the proceedings dragged on as the parties tried to negotiate a deal.
The collapse of Evergrande, which defaulted for the first time in 2021 and was declared bankrupt in the United States, was closely followed by Chinese authorities because the group was a pillar of the Chinese economy.
China’s construction and real estate sectors account for about a quarter of China’s GDP, but Chinese President Xi Jinping has said the debt amassed by Evergrande and other real estate companies poses an unacceptable risk to China’s financial system and economy. Overall economic health.
Authorities have gradually restricted developers’ access to credit since 2020, triggering a wave of payment defaults. At the end of June, Evergrande estimated its debt at $328 billion.
with AFP
This is a new record that scientists from the Korea Fusion Energy Institute (KFE) have…
Damages associated with drought, floods, hail and other increasingly violent events are expected to increase…
An estimated 9 million people in the United States are still waiting for their final…
The death of seven humanitarian workers from the American NGO World Central Kitchen in an…
Today, at one o'clock in the morning, Gamer updates it Boutique de Fortnite Through the…
The Basic Instinct and Casino actress looks back at a time in Hollywood when adapting…