File for Evergrande Bankruptcy Protection

Chinese real estate giant Evergrande filed for bankruptcy in the US.

The company, which went into default in 2021 and posted a total loss of $81 billion in the past two years,
His goal is to sign a restructuring agreement with foreign creditors.

The failure of Evergrande, which has a huge debt of $340 billion in total, to default on its overdue bond debts, also triggered the liquidity crisis in China’s real estate sector.

Having signed a restructuring agreement with Evergrande, the world’s most indebted real estate company, international creditors hold billions of dollars in corporate bonds.

According to data from Bloomberg, the company has about 19,000 million dollars in foreign debt.

The bankruptcy protection petition, signed in New York by Evergrande’s foreign representative Jimmy Fong, falls under section 15 of US bankruptcy law, which protects non-US companies in the process of restructuring from creditors who want to sue them or freeze their US assets.

The Chinese company is seeking recognition of ongoing restructuring talks in Hong Kong, the Cayman Islands and the British Virgin Islands.

Evergrande representatives are expected to meet foreign creditors this month in Hong Kong to discuss the restructuring deal.

FEAR OF THE CRISIS GROWS IN CHINA

The failure of another real estate giant, Country Garden, and asset manager Zhongrong to default on their overdue debts in China recently has raised concerns in China and global markets.

Faced with deflation, falling exports and high youth unemployment, the Beijing administration fears the spread of the crisis in the construction industry, which accounts for more than a quarter of the economy.