A Hong Kong court has ordered one of China’s biggest property developers, Evergrande Group, to liquidate after it was unable to reach a restructuring deal with creditors over hundreds of billions of dollars it owes.
Key points:
- Evergrande has been ordered to liquidate after failing to come up with a restructuring deal with creditors over US$300 billion in debts owed
- The liquidator will now attempt to take control of Evergrande assets outside China, but there are fears that could pave the way for other lawsuits
- It could take years for the offshore liquidator to take control of subsidiaries across mainland China
China should have just ripped the bandaid off years ago.
I wonder if ripping it off might have caused a big enough economic problem to threaten the stability of the government.
They probably weighed what would happen then vs supporting the business for a while. Problem is no one can tell the future, so they got caught.
It may be the best case scenario for them still. This could be their “economic soft landing”.