A symbol of the sector’s setbacks real estate in the year Chinathe team Evergrande will be settled. A Hong Kong court made the decision on Monday, January 29, when the real estate giant failed to present a credible restructuring plan. It was Evergrande China’s largest developerbut it has accumulated debts until presenting the responsibility of Over $300 billion. “(Considering) the company’s apparent lack of progress in presenting a viable restructuring plan. (…) I think it is appropriate for the court to issue a judgment for the liquidation of the company, and that is what I order”said Judge Linda Chan, who is expected to file details of her ruling this afternoon and may appoint a liquidator for Evergrande.
However, it is not immediately clear how a decision made in the semi-autonomous Chinese region of Hong Kong might play out in mainland China, where the team is based. “Today’s judicial decision is against our original intention (…). It is very regrettable»Evergrande CEO Shawn Siuk told Chinese business media 21st Century Business Herald.
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After the morning session was adjourned, Fergus Saurin, a lawyer representing a group of creditors, told reporters that Evergrande had not. “in conversation” with them “There were last-minute attempts at dialogue that came to nothing”he said “The company has only itself to blame for going into liquidation.”
It has the actions of the Chinese real estate giant More than 20% unscrewed after announcing its settlement. The Hong Kong Stock Exchange suspended trading in the shares. “(…) Trading in the securities of Evergrande Property Services Group Limited was suspended at 10:19 local time (2:19 GMT)”stated the financial center, which also canceled the listing of EV subsidiary Evergrande NEV.
A creditor filed a liquidation petition against the developer in a Hong Kong court last year, but proceedings dragged on as the parties tried to negotiate a settlement. The collapse of Evergrande, in for the first time in 2021 and which was declared bankrupt in the United States because the group was closely monitored by Chinese authorities because it was a pillar of the Chinese economy.
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China’s construction and real estate sector accounted for about a quarter of China’s GDP, but Chinese President Xi Jinping said the debt piled up by Evergrande and other real estate companies posed an unacceptable risk to China’s financial system and economy. Authorities have gradually restricted developers’ access to credit since 2020, a wave of payment defaults. At the end of June, Evergrande had estimated debts of $328 billion.