Chinese real estate giant Evergrande has filed for bankruptcy protection in the US.
China Evergrande Group filed for ‘Chapter 15 bankruptcy protection’ in a New York court on Thursday. ‘Chapter 15’ protects the assets of a foreign company attempting to restructure its debts in the US.
In a statement on Friday, the company said: ” The company noted relevant reports of the media and wishes to clarify that the company is pushing forward its offshore debt restructuring as planned. As the company’s U.S. dollar denominated notes are governed by New York law, the company has applied to the U.S. Court under Chapter 15 of the United States Code for recognition of the schemes of arrangement under the offshore debt restructuring for Hong Kong and the British Virgin Islands. The application is a normal procedure for the offshore debt restructuring and does not involve bankruptcy petition. Holders of the company’s securities and potential investors of the company are reminded to exercise caution when dealing in the securities of the company.”
In 2021, Evergrande defaulted on its massive debts, sending shockwaves through global financial markets. This move comes at a time when concerns about issues in China’s real estate market are mounting for the world’s second-largest economy.
The Chinese developer has more than 1,300 projects in over 280 cities in the country.
After defaulting on debt repayments, Evergrande is working to renegotiate agreements with creditors.
With estimated debts of over $300 billion, it was the world’s most heavily indebted property developer. Trading of the company’s shares has been suspended since last year. Evergrande announced last month that it incurred a total loss of 581.9 billion yuan ($80 billion; £62.7 billion) in the past two years.
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