Thursday, November 28, 2024

Court orders China Evergrande to liquidate with $300 billion debt

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A Hong Kong court on Monday ordered Evergrande, the world’s most indebted real estate developer, into liquidation, a ruling that could further undermine foreign investors’ confidence in China.

Shares in the company and two of its subsidiaries were suspended on Monday after Judge Linda Chan said “enough is enough” after months of delays in developing a restructuring plan.

It is unclear whether Chinese authorities will accept Monday’s Hong Kong court ruling and allow international creditors to seize the company’s assets.

Evergrande, once China’s biggest real estate seller, has been trying to avoid formal bankruptcy since 2021, when it defaulted on $330 billion in debt and shocked global markets.

The company’s woes track the rapidly deteriorating health of China’s real estate sector, which accounts for about a fifth of growth in the world’s second-largest economy, and the country’s overall outlook.

China’s stock market performed particularly poorly last year, with gross domestic product (GDP) growing just 5.2%, the slowest growth in 30 years, excluding the three years of the pandemic.

About $6 trillion has been wiped from the value of Chinese and Hong Kong stocks over the past three years, underscoring investors’ concerns about the future of China’s economy.



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