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HONG KONG (AP) — A Hong Kong court on Monday ordered property developer China Evergrande Group into liquidation after it was unable to reach a restructuring agreement with creditors.
Judge Linda Chan said that it was appropriate for the court to order Evergrande to wind down its business, given the “lack of progress on the part of the company in pursuing a viable restructuring proposal” as well as Evergrande’s bankruptcy.
Evergrande was granted a brief reprieve in December, when it said it was trying to “refine” a new debt restructuring plan for its more than $300 billion in liabilities.
Fergus Saurin, a lawyer representing an ad-hoc group of creditors, said on Monday he was not surprised by the outcome.
“The company has failed to engage with us. There is a history of last-minute scrambling that has gone nowhere,” he said.
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Saurin said his team was acting in good faith throughout the process and that Evergrande “only has itself to blame for the collapse.”
Evergrande, the world’s most indebted property developer, is one of several property firms that ran into trouble when Chinese regulators cracked down on excessive borrowing in the real estate sector.
The company defaulted on its financial obligations in 2021 for the first time, just a year after Beijing banned lending to property developers in an effort to cool a property bubble.
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