A Hong Kong court has ordered Chinese real estate giant Evergrande Group to undergo liquidation following multiple failed debt restructuring attempts. The company has over $300B in liabilities and hundreds of unfinished apartment complexes nationwide.
The world's most heavily indebted property developer, Evergrande has been trying to avoid bankruptcy since 2021, when the company defaulted on its debt. The company aggressively borrowed for decades as it helped fuel the country's construction boom. In addition to prolific spending, a government crackdown on debt financing pushed the company into a cash crunch.
The decision allows for a court-appointed liquidator to sell assets globally and repay debts, though much of the company's assets have reportedly already been sold or seized. The impact is expected to ripple through China's struggling real estate sector, which makes up about a quarter of the economy. It is unclear whether Chinese authorities will recognize the court's ruling.