Cross-posted from: https://feddit.de/post/8365247
The liquidation could have severe consequences for the world’s second-largest economy, as the Chinese property sector continues to struggle to recover from the pandemic and Beijing grapples with an underperforming economy.
A crackdown three years ago by China on real estate speculation caused a property crisis and left Evergrande owing $US300 billion ($455 billion).
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A Hong Kong court has ordered one of China’s biggest property developers, Evergrande Group, to liquidate after it was unable to reach a restructuring deal with creditors over hundreds of billions of dollars it owes.
But High Court Judge Linda Chan issued the liquidation order on Monday after Evergrande was unable to come up with a restructuring plan that would satisfy its international creditors.
“Evergrande’s liquidation is a sign that China is willing to go to extreme ends to quell the property bubble,” said Andrew Collier, managing director of Orient Capital Research in Hong Kong.
The liquidation petition was first filed in June 2022 by Top Shine, an investor in Evergrande unit Fangchebao which said the developer had failed to honour an agreement to repurchase shares it had bought in the subsidiary.
Speaking outside the courtroom after the hearing, Fergus Saurin, a partner at law firm Kirkland and Ellis, which represents a key group of Evergrande creditors, said: "We are not surprised by the outcome.
The Reserve Bank in a recent financial stability review, warned that problems stemming from the “sharp deterioration” in China’s property sector could lead to a global slowdown, weaker commodity prices and “reduced Chinese imports of Australian goods and services”.
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