Court orders liquidation of Evergrande

The world’s most indebted real estate developer, China Evergrande Group, has been ordered to liquidate by a Hong Kong court. The Chinese real estate crisis has reached a new threshold. The world’s most indebted real estate developer, China Evergrande Group, has been ordered to liquidate by a Hong Kong court. Evergrande, whose liabilities amount to $333 billion, has held restructuring talks with creditors in recent months but has failed to achieve results. Following the court ruling, Evergrande shares lost 21 percent and trading was suspended. The ruling could result in the liquidation of Evergrande’s assets outside of China. It is not yet clear to what extent the ruling will be implemented within China. Evergrande, which failed to make its foreign exchange bond payment in 2021, triggered a liquidity crisis in the Chinese real estate sector. According to data compiled by Bloomberg, most of Evergrande’s dollar-denominated bonds were trading at 1.5 cents per dollar as of last Friday. On the other hand, China continues to support distressed stock markets. China banned short selling in some stocks at the beginning of the week.