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China property giant Evergrande files for bankruptcy
[GEO.TV] China Evergrande which is the world's most heavily indebted property developer and became the poster child for China's property crisis, Thursday filed for protection from creditors in a US bankruptcy court.The company sought protection under Chapter 15 of the US bankruptcy code, which shields non-US companies that are undergoing restructurings from creditors that hope to file lawsuits or tie up assets in the United States. Tianji Holdings, a related company, also sought Chapter 15 protection Thursday in Manhattan bankruptcy court. A lawyer for Evergrande did not immediately respond to requests for comment. Evergrande's filing comes amid growing fears that problems in China's property sector could spread to other parts of the country's economy as growth slows. Since the sector's debt crisis unfolded in mid-2021, companies accounting for 40% of Chinese home sales have defaulted. The health of Country Garden, China's largest privately run developer, is also worrying investors after the company missed some interest payments this month. Evergrande recently had $330 billion of liabilities. A late 2021 default triggered a string of defaults at other builders, resulting in thousands of unfinished homes across China.
Evergrande has said creditors may be able to vote this month on a restructuring, with possible approval by Hong Kong and British Virgin Islands courts in the first week of September. The company proposed scheduling a Chapter 15 recognition hearing for Sept. 20. Evergrande is the world's most heavily indebted property developer and became the poster child for China's property crisis. The company’s filing on Thursday comes amid growing fears that problems in China's property sector could spread to other parts of the country's economy as growth slows. Since the sector's debt crisis unfolded in mid-2021, companies accounting for 40% of Chinese home sales have defaulted. A late 2021 default triggered a string of defaults at other builders, resulting in thousands of unfinished homes across China. Last month, Evergrande posted a combined $81 billion loss for 2021 and 2022, prompting investor worries about the viability of a debt restructuring plan it proposed in March. Related: Evergrande: 2023-06-10 China May Be Headed for a Lost Decade Evergrande: 2022-08-01 China To Pelosi: You Will ‘Perish' Over Taiwan Evergrande: 2022-06-18 There’s a run on Chinese banks and it’s being ignored by the world Posted by: Fred 2023-08-18 |
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