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Evergrande building in Hong Kong: “It’s enough.”
Photo: TYRONE SIU / REUTERS
The name “Evergrande” promises eternal greatness, but that could soon be over: a court in Hong Kong apparently announced on Monday that the heavily indebted Chinese company would be wound up. Judge Linda Chan made a corresponding judgment in the Chinese Special Administrative Region, as several media outlets unanimously reported.
Creditors had sued the court because China Evergrande repeatedly missed payments. The company had previously tried to avert liquidation with a restructuring plan.
The hearing lasted a year and a half and the company is still unable to put forward a concrete restructuring proposal, said Chan, as the South China Morning Post reported. "I think it's time for the court to say enough is enough," she said.
The decline of Evergrande exemplifies the real estate crisis in China. The group, which is listed on the Hong Kong stock exchange, is the world's most indebted property developer, with the equivalent of more than 300 billion US dollars. The settlement is likely to further reduce confidence in the struggling real estate market of the world's second largest economy and cause turbulence on the stock market. The government recently tried to reassure investors with support measures.
"The company has to blame itself for the dissolution," said creditor lawyer Fergus Saurin after the court's decision. Evergrande failed to enter into dialogue with creditors.
After the announcement of the liquidation of the real estate group, Evergrande shares on the Hong Kong stock exchange fell by more than 20 percent. A little later, the stock exchange announced that it would stop trading in securities from Evergrande and its electric vehicle subsidiary.
Other companies in the Chinese real estate industry are also heavily indebted and sometimes fight with creditors in court.
mic/dpa-AFX/AFP