Aug. 18 (UPI) — Evergrande, a prominent Chinese property giant, has filed for bankruptcy protection in New York as it aims to restructure its staggering debt of $300 billion accumulated over 15 years. This strategic move gives the company time to address its financial challenges and emerge stronger.
The bankruptcy petition was made under Chapter 15 of the U.S. bankruptcy code, which offers protection from lawsuits and asset seizures to non-U.S. companies operating in the United States.
China Evergrande, one of the top 10 property developers in China, has requested the recognition of ongoing restructuring discussions in Hong Kong, the Cayman Islands, and the British Virgin Islands as part of its bankruptcy filing.
The petition states that a “scheme of creditors” meeting is scheduled to take place at the Hong Kong office of Sidley Austin, the U.S. law firm representing Evergrande.
Additionally, Evergrande’s subsidiary, Tianji Holding Limited, and its sub-division, Scenery Journey, have also sought Chapter 15 bankruptcy protection in conjunction with the parent company.
Trading of Evergrande’s shares on the Hong Kong stock exchange has been suspended since March 2022 following a default on debt interest payments totaling $1.2 billion in international loans.
Last month, Evergrande revealed a massive loss of $81.1 billion over the past two years due to the financial strain of completing over a thousand projects in 280 cities across China while simultaneously making payments to suppliers and lenders. The company attributes these losses to a decline in property values and higher borrowing costs.
Evergrande’s financial troubles have had a ripple effect on China’s real estate sector, a critical driver of economic growth. The sector accounts for approximately one-third of the country’s GDP, leading to other developers defaulting on their debts and numerous unfinished projects across China.
Since its initial public offering (IPO) in Hong Kong in 2009, Evergrande has expanded into various sectors including tourism and recreation, healthcare, finance, EV manufacturing, infrastructure, entertainment, agribusiness, and sport. Notably, the company acquired its hometown soccer club, Guangzhou FC, in 2010 and invested heavily in the team. However, its plans for a new stadium worth $1.7 billion remain incomplete after government intervention.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
