Evergrande, China’s Real Estate Giant, Seeks Bankruptcy
2 mins read

Evergrande, China’s Real Estate Giant, Seeks Bankruptcy

Thursday in New York, China’s Evergrande Group, once the country’s second-largest property developer, filed for bankruptcy.

The troubled company borrowed extensively and defaulted on its debt in 2021, triggering an immense property crisis in China’s economy, which is still being felt.

Evergrande filed for Chapter 15 protection from bankruptcy, which authorizes a US bankruptcy court to intervene when a foreign country is involved in an insolvency case. 

The purpose of Chapter 15 bankruptcy is to foster cooperation between US courts, debtors, and foreign tribunals involved in cross-border insolvency proceedings.

Read Articles:  Recall Alert: Dehumidifier Brands Pulled from Market Due to Fire and Burn Hazards-Gree

Evergrande’s Default’s Effect on China’s Property Markets

Real estate in the world’s second-largest economy has long been viewed as a vital development engine, accounting for as much as 30 percent of GDP. 

However, Evergrande’s default in 2021 sent shockwaves via China’s property markets, harming homeowners and the country’s broader financial system.

After Beijing began clamping down on over borrowing by developers in an effort to curb soaring housing prices, the company defaulted.

Several other prominent Chinese developers, such as Kasia, Fantasia, and Shimao Group, fell behind on their debts since Evergrande’s bankruptcy. 

Recent statements by another Chinese real estate giant, Country Garden, that it would “consider adopting various debt management measures” have fueled rumors that the company may be planning to restructure its debt as it is having difficulty raising cash.

The industry’s difficulties have been exacerbated by the country’s overall economic slowdown.

Read Articles:  ANCHOR Property Tax: New Jersey Residents Set To Receive Property Tax Rebates Just Prior To Election

Struggled to Repay Debts

Thursday in New York, China’s Evergrande Group, once the country’s second-largest property developer, filed for bankruptcy.

Based on its website, Evergrande is a massive company with over 1,300 real estate developments in over 280 cities. 

The company also operates a theme park business, a health care business, and an electric vehicle business.

Evergrande has struggled to repay its debts since it defaulted on its obligations in late 2021.

At the conclusion of last year, the property company’s debt reached 2,437 trillion yuan ($340 billion). This represents approximately 2% of China’s total gross domestic product.

Last month, Evergrande disclosed in a stock market disclosure that it had lost $81 billion in shareholder funds between 2021 and 2022.

Source: CNN

Read Articles: Vibrio Vulnificus: Rare Flesh-Eating Bacterial Infection Claims Lives In Connecticut And New York

Leave a Reply

Your email address will not be published. Required fields are marked *