Evergrande, symbol of China’s real estate crisis, is headed for liquidation

(CNN) — A Hong Kong court on Monday ordered the liquidation of Evergrande Group, the world’s most indebted real estate developer, Chinese media reported.

The liquidation order comes after the troubled Chinese property giant and its foreign lenders failed to reach an agreement on how to restructure the company’s huge debt. According to the court’s website, the court will hold another hearing in the afternoon “to regulate the order”, which could lead to the appointment of a liquidator for Evergrande.

The developer, based in Shenzhen, has become an example of China’s real estate crisis since 2021, with liabilities totaling more than US$328 billion at the end of June last year. Last September, its founder and chairman Xu Jiayin was named as a suspect in the “crimes” and detained by police.

Evergrande, once China’s second-largest real estate developer, defaulted on its financial obligations to its creditors in late 2021, triggering a crisis in the real estate sector that is impacting the broader economy. A former Chinese official claimed last year that China had enough vacant properties to house more than its entire population of 1.4 billion.

—Lucas Lillieholm contributed reporting.

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