This morning (January 29), judge Linda Chan (Hong Kong) issued a verdict against Evergrande. She said this company could not come up with a reasonable restructuring plan even though the trial had been delayed for many months.
Currently, the court finds that this is more than enough” she emphasized.
The judge said he would announce more details about this decision this afternoon. Experts believe that the court will appoint a person to be temporarily responsible for Evergrande’s assets.
This company currently has about 240 billion USD in assets but has debt of more than 300 billion USD. They are considered the most indebted company in the world.
Evergrande has defaulted on national debt economic situation at the end of 2021 and became a typical example of the crisis in real estate market China.
Previously, this group carried out a debt reform plan worth 23 billion USD for a special group of bondholders for nearly 2 years. However, this initial plan failed at the end of September last year when billionaire Hua Jia An, founder of Evergrande, was investigated.
“The fact that Evergrande had to liquidate assets was a signal that China was willing to do to end the real estate bubble. This may have a positive impact on the economy in the long term, but will cause difficulties in the short term,” Andrew Collier, director of research company Orient Capital Research, commented to Reuters.
The verdict to liquidate Evergrande is likely to shake China’s already fragile capital and real estate markets.
Market Chinese real estate is still deep in the quagmire of crisis. Market stock also fell to a 5-year low. News about Evergrande could make the situation worse.