China Evergrande, which owes S$402 billion, issued liquidation order by Hong Kong court

The property developer failed to reach an agreement with overseas creditors.

Tan Min-Wei | January 29, 2024, 11:37 AM


A Hong Kong High Court judge has issued a liquidation order against beleaguered property developer China Evergrande.

Liquid Courage

On Jan. 29, a Hong Kong court ordered China Evergrande Group to be liquidated.

This comes after years of instability and doubt surrounding the property developer, who first defaulted on its debt in 2021 with more than US$300 billion (S$402 billion) in liabilities.

CNBC reported that Evergrande shares fell 20 per cent on Jan. 29 before trading was halted at around 10:18am.

Evergrande and its international creditors had been negotiating for months on a debt restructuring plan, according to the Financial Times, including negotiations over the weekend of Jan. 27 in a final attempt to stave off liquidation.

But negotiations failed to provide a resolution.

No pain no gain

Experts that Reuters spoke to remarked that the liquidation of Evergrande was long expected, and was unlikely to disrupt property markets too much going forward.

One said that the impact of the liquidation has been "priced in". Others expressed uncertainty as to how creditors could seize Evergrande's assets, the bulk of which are in mainland China.

Observers will also keep an eye out for how this will affect Chinese citizens who had invested in Evergrande properties.

In recent years, Chinese property investors affected by failing developers has been a common feature of Chinese news, even going to far as to affect overseas properties.

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Top image via Wikimedia