Image: STRINGER (APA/AFP/STRINGER)
Judge Linda Chan made a corresponding ruling on Monday in the Chinese Special Administrative Region, as several media outlets unanimously reported. Creditors had sued the court because China Evergrande repeatedly missed payments.
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No “concrete” restructuring plan
“Enough is enough,” Chan said. Evergrande will be wound up in the absence of a “concrete” restructuring plan. The group did not offer effective communication or solutions for more than 18 months. The proceedings had previously been postponed several times. It is expected that an interim insolvency administrator will be appointed. The company had previously tried to avert liquidation with a restructuring plan. However, Chan complained that the company was still unable to put forward a concrete restructuring proposal, according to the South China Morning Post.
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Most indebted real estate company in the world
Evergrande, the world’s most indebted real estate company with more than $300 billion (275.96 billion euros), defaulted on its foreign debts at the end of 2021 and became a symbol of the debt crisis in the Chinese real estate sector. The decision to liquidate the construction group with $240 billion in assets is likely to shake up China’s already struggling capital and real estate markets.
The company’s shares were trading down as much as 20 percent before the hearing. Trading in China Evergrande and its listed subsidiaries New Energy Vehicle Group and Evergrande Property Services was suspended following the ruling. The government had only recently tried to stabilize the stock market again. Other companies in the Chinese real estate industry are also heavily indebted and sometimes fight with creditors in court.
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