Evergrande Ordered to Liquidate as Debt Talks Fail
A Hong Kong court has ordered the liquidation of the highly indebted China Evergrande Group. Judge Linda Chan handed down the judgment on Monday in Hong Kong, according to media reports, resulting in a sharp share price decline.
She said the creditors from abroad had taken the company to court because of its missing several payments. The real estate giant had previously tried to avert liquidation with a reorganisation plan.
Chan said the hearing had lasted a year and a half, and the company was still unable to put forward a concrete proposal for restructuring, the South China Morning Post newspaper reports.
“I think it is the time for the court to say enough is enough,’’ she said, according to the newspaper. The group, which is listed on the Hong Kong Stock Exchange, is the world’s most indebted property developer with the equivalent of more than 300 billion dollars of debt.
The liquidation is likely to further diminish confidence in the ailing property market of the world’s second-largest economy and cause turbulence in the stock market. Chan added that the government recently tried to stabilise again. On Monday, the shares of Evergrande Group subsidiaries were suspended from trading.
Evergrande, the world’s most indebted developer, had been granted a brief reprieve in December after arguing it needed time to refine its restructuring plan. Chan said the court had in December “made it very clear it expected to see a fully formulated and viable proposal”.
Evergrande Executive Director Shawn Siu called the ruling regrettable but said the group would do “everything possible to safeguard the stability of its domestic business and operation”, which he said is independent of its Hong Kong arm.
Evergrande’s default on repayments to international investors in 2021, after Beijing began cracking down on excessive borrowing for real estate, sent shockwaves through China’s property sector, which accounts for an estimated 15-30 per cent of the economy.
More than 50 Chinese real-estate developers have defaulted or missed payments during the past three years, according to credit ratings agency Standard and Poor’s (S&P). Selloffs Provoke Spike in Nigerian Treasury Bills Yield
Hong Kong-listed shares in Evergrande plunged by more than 20 per cent following the ruling on Monday, before the city’s stock exchange halted trading in the stock. #Evergrande Ordered to Liquidate as Debt Talks Fail
