Chinese developer Evergrande has filed for bankruptcy in the United States
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One of the largest Chinese developers, Evergrande, filed for bankruptcy and protection from creditors in the United States – the restructuring of the company’s billions of dollars in debt continues.
He writes about it Financial Times.
The bankruptcy filing in New York court relies on the Chapter 15 process of the US Bankruptcy Code, which is used by foreign companies seeking recognition of their restructuring in the US.
The group is expected to hold meetings with creditors in Hong Kong in August on the restructuring plan proposed in March.
At the end of 2021 Evergrande announced defaulted on its dollar-denominated debt, leading to a crisis in China’s entire real estate sector and a domino chain of defaults by companies in the industry.
This has had a negative impact on the country’s economic growth and is still putting increasing pressure on politicians in Beijing. According to Bloomberg, the company has about $19 billion in liabilities abroad.
Currently, there are fears of a slowdown in growth in the real estate sector, which normally provides more than a quarter of China’s economy. The fallout threatens to spill over into other areas of the economy, further damaging the country’s economic recovery as it grapples with deflation, weak exports and soaring youth unemployment.
Evergrande is the developer with the largest amount of debt in the world. The company’s liabilities are estimated at $340 billion, and last month it announced losses of $81 billion in 2021 and 2022.
At the time of the default, Evergrande had about $20 billion in international bonds and offered investors bonds linked to the group’s Hong Kong-listed subsidiaries.
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