theo CNN And reutersEvergrande filed for Chapter 15 bankruptcy protection in Manhattan bankruptcy court on August 17, with rules that allow a US bankruptcy court to intervene in a case involving another country.
This will help protect the corporation from creditors who want to sue them or mortgage assets in the US.
Logo on the Evergrande building in Shenzhen city, Guangdong province – China – Photo: Reuters
An affiliate – Tianji Holdings – sought similar protection in a Manhattan court on the same day.
Earlier, electric vehicle unit China Evergrande New Engie Vehicle Group also announced its own restructuring proposal on August 14.
Evergrande has yet to respond to everyone’s request for comment. reuters And CNN.
Real estate giant Evergrande was in trouble and had borrowed heavily but has now been unable to pay it back, defaulting on its debt in 2021, sparking a major crisis in China’s real estate sector.
The group, which is struggling to repay a debt of 2.473 billion yuan ($340 billion), or 2% of China’s gross domestic product (GDP), has become one of the most indebted property companies in the world.
Last month, it reported in a stock market filing that it had lost $81 billion in shareholder funds in 2021 and 2022.
Evergrande’s 2021 default has hit home owners and China’s wider financial system heavily, leading to defaults by several other major property developers, including Cassia, Fantasia and Shimao Corporation.
Companies that defaulted during the 2021 debt crisis accounted for 40% of the country’s domestic sales.
Recently, another Chinese property giant, Country Gardens, said it is “considering various debt management measures”, as well as the recent liquidity crisis, which has led to fears they could be on the verge of default And can bring another earthquake.