China’s property giant Evergrande files for bankruptcy in US
China’s massively-in-debt property conglomerate, Evergrande Group, has filed for Chapter 15 bankruptcy protection in a US court.
The firm referenced restructuring proceedings in Hong Kong, the Cayman Islands, and the British Virgin Islands in a filing.
The company defaulted in 2021 and announced an offshore debt restructuring program in March.
Evergrande shares suspended from trading since March 2022.
The Chapter 15 bankruptcy protection permits a US bankruptcy court to intervene in cross-border insolvency cases involving foreign entities undergoing creditor-driven restructuring.
It aims to safeguard debtor assets and support the revival of financially distressed businesses.
Alongside Evergrande, its affiliate Tianji Holdings and subsidiary Scenery Journey also sought Chapter 15 protection in a Manhattan bankruptcy court.
This underscores concerns the difficulties in China’s massive real estate sector could affect its overall economic health.
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Major developers like Country Garden grapple with financial challenges and payment issues, signaling the potential spillover effects.
Despite policy shifts indicating increased support for the property sector, worries persist among investors.
Evergrande reported substantial losses over the past two years, attributed to project delays, repayment struggles, and write-downs, highlighting the sector’s ongoing troubles.
The bankruptcy filing was signed by Jimmy Fong, identified as a “foreign representative” of China Evergrande Group.
It also noted a “scheme creditors” meeting planned at the Hong Kong office of Sidley Austin, the US-based law firm representing Evergrande.