A Hong Kong court orders the liquidation of Chinese real estate giant Evergrande Group

A Hong Kong court ordered the liquidation of Chinese real estate giant Evergrande Group (Reuters/Lam Yik)

a court of hong kong ordered liquidation of real estate developer on Monday China Evergrande Group After failing to reach a restructuring agreement with creditors.

Judge linda chan Said that it was appropriate for the court to order its liquidation Evergreen Given the bankruptcy as well as “the lack of progress by the company in presenting a viable restructuring proposal” Evergreen,

The liquidation order is likely to impact the financial system. ChinaEven though the authorities are trying to stop the selloff in the Chinese stock market. Evergrande’s liquidation is also likely to reduce confidence in the real estate sectorThe decline has come as developers are struggling to meet their obligations following a crackdown on excessive borrowing in the sector.

To Evergreen one was provided brief relief In December he said he was trying to “refine” A new debt restructuring plan Liabilities of over $300 billion.

The judge in charge of the case said it was appropriate for the court to order the liquidation of Evergrande given the company’s “lack of progress in presenting a viable restructuring proposal” (Reuters/Lam Yik)

fergus saurina lawyer who represents ad hoc group of creditorsSaid Monday he was not surprised by the outcome.

“The company has failed to engage with us. A tale of a last-minute compromise that went nowhere“, Said.

Saurin He said his team has been working in good faith throughout the process Evergreen “He’s the only one to blame for the ending.”

The judge is expected to provide further reasons for the liquidation order during a separate court session on Monday afternoon.

EvergreenHe Most indebted real estate developer in the worldIt was one of several companies in the sector that ran into trouble when Chinese regulators cracked down on excessive lending in the real estate sector.

The company defaulted on its financial obligations for the first time in more than a year in 2021 Beijing Restricting lending to real estate developers in an effort to deflate the housing bubble.

It is unclear how the liquidation order will affect the company’s massive operations. Evergreen In China Continental. As a former British colony, hong kong Operates under a legal system that is separate from, but increasingly influenced by, China Communist.

In some cases, the courts of China Continental has recognized bankruptcy decisions hong kongBut analysts say that Evergreen This is like a test case in a way.

Evergrande is the world’s most indebted real estate developer (Reuters/File)

Real estate sector boosted economic boom ChinaBut developers borrowed heavily as they transformed cities into forests of apartments and office towers. This has contributed to increasing total corporate, government and household debt by more than 300% of annual gross domestic product, which is unusually high for a middle-income country.

including other promoters country gardenis the largest real estate developer in Chinahave also faced problems, the effects of which extend inside and outside the financial systems China,

actions of Evergreenquoted in hong kong, falling nearly 21% before being suspended from trading on Monday. benchmark hang Seng It rose 1% after the decision, while shares of other real estate companies gained. country garden increased by 2.9% and Sanac China Holdings Jumped 4%.

The fallout from the real estate crisis has also affected the shadow banking industry. China -Institutions that provide financial services similar to banks but operate outside banking regulations, e.g. zhongzi enterprise group, zhongzhiwhich gave huge loans to developers, said it was insolvent.


Source link

About Admin

Check Also

14 richest men in the world according to forbes

The club of billionaires worth more than $100 billion is seeing its ranks swell, testament ... Read more

Leave a Reply

Your email address will not be published. Required fields are marked *