Chinese real estate firm Evergrande files Chapter 15 bankruptcy in US
Chinese real estate firm Evergrande, the world’s most indebted property developer, has filed for Chapter 15 bankruptcy protection in the US. The move is a way for the company to protect its assets in the US while it works on a restructuring deal with creditors.
Evergrande defaulted on its debts in 2021, which sent shockwaves through global financial markets. The company has more than 1,300 projects in more than 280 cities in China, and its other businesses include an electric car maker and a football club.
Chapter 15 bankruptcy protection allows a US court to oversee the restructuring of foreign companies that are in financial trouble. This helps to protect the companies’ assets and gives them a chance to reorganize and avoid liquidation.
Tianji Holdings and Scenery Journey, two affiliates of Evergrande, have also filed for Chapter 15 protection. This means that these companies will now be under the supervision of a U.S. court as they work to restructure their debts.
The bankruptcy filing is a sign of the deepening crisis in China’s real estate market. The sector is a major driver of the Chinese economy, and its slowdown could have a significant impact on growth. The government has been trying to cool the property market for some time, but the Evergrande crisis could force it to take more drastic measures.
Recently, Country Garden, which used to be one of China’s largest developers, struggled to make interest payments on US dollar-denominated bonds and issued a profit warning. The firm has also suspended trading in at least 10 of its mainland-China traded yuan bonds
The full impact of the Evergrande crisis is still unknown, but it is clear that it is a major challenge for the Chinese economy. The government will need to carefully manage the situation to avoid a wider financial crisis.
Evergrande Group is a Fortune Global 500 enterprise and owns eight major industries, such as Evergrande Real Estate, Evergrande New Energy Auto, Evergrande Property Services, HengTen Networks, FCB, Evergrande Fairyland, Evergrande Health, Evergrande Spring, providing a full range of services to hundreds of millions of customers. Currently, the total assets of Evergrande Group have reached RMB 2.3 trillion, and annual sales volume exceeded RMB 700 billion, with accumulated taxation of more than RMB 300 billion. It has 200,000 employees.
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