Property developer China Evergrande Group has been ordered to liquidate after it failed to reach a restructuring deal with creditors
A Hong Kong court on Monday ordered property developer China Evergrande Group to liquidate after it was unable to reach a restructuring deal with creditors.
Judge Linda Chan said it was appropriate for the court to order Evergrande to wind up its business given a “lack of progress on the part of the company putting forward a viable restructuring proposal” as well as Evergrande’s insolvency.
The liquidation order is likely to impact China’s financial system, even as authorities try to prevent a selloff in the Chinese stock market. Evergrande’s liquidation will likely also lessen confidence in the property sector, which has been slumping as developers struggle to meet their obligations following a crackdown on excessive borrowing in the sector.
Evergrande had been granted a brief reprieve in December after it said it was attempting to “refine” a new debt restructuring plan of more than $300 billion in liabilities.
