A Hong Kong court on Monday, January 29, ordered the liquidation of the struggling Chinese real estate giant Evergrande.
"(Considering) the obvious lack of progress on the part of the company in presenting a viable restructuring plan. (...) I consider it appropriate for the court to render a judgment of liquidation of the company, and that is what I order,” said Judge Linda Chan.
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The shares of Chinese real estate giant Evergrande fell by more than 20% after the announcement of its liquidation on the Hong Kong Stock Exchange, which suspended trading of the stock.
“Trading in the securities of (...) Evergrande Property Services Group Limited was suspended at 10:19 a.m. local time (2:19 a.m. GMT), indicated the Hong Kong Stock Exchange which also suspended the listing of its subsidiary of Evergrande NEV electric vehicles.
Distrust of investors and consumers
Evergrande, which has $240 billion in assets, defaulted on its debt in 2021, causing tremors throughout China's real estate market, which has since fallen into a deep crisis.
The liquidation of Evergrande comes in a context of low confidence among investors and consumers.
However, it is not expected that this decision will have an immediate impact on the developer's operations - including its short-term construction projects -, while such a process could extend over months or even several years due to the numerous stakeholders and Evergrande subsidiaries spread across mainland China – a separate jurisdiction from Hong Kong.
With AFP
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