Evergrande, symbol of China’s property crisis, heads to liquidation

CNN

By Laura He and Nectar Gan, CNN

Hong Kong (CNN) — Evergrande Group, the world’s most indebted property developer, was ordered to be liquidated by a Hong Kong court on Monday, according to Chinese media.

The wind-up order comes after the embattled Chinese real estate giant and its overseas creditors failed to reach an agreement on how to restructure the company’s massive debt. The court will hold another hearing in the afternoon “for regulating order,” according to the court’s website, which could lead to the appointment of a liquidator for Evergrande.

The Shenzhen-based developer has become a poster child of China’s property crisis since 2021, with total liabilities of over $328 billion at the end of June last year. Last September, its founder and chairman Xu Jiayin was suspected of “crimes” and detained by the police.

Previously China’s second biggest real estate company, Evergrande defaulted on its financial obligations to creditors at the end of 2021, igniting a crisis in the property sector that continues to weigh on the wider economy. A former Chinese official said last year that China has enough vacant properties to house more than its entire population of 1.4 billion.

This is a developing story and will be updated.

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Lucas Lilieholm contributed to reporting.