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China Evergrande’s collapse rattles global financial markets.

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TLDR: A Hong Kong court has ordered the liquidation of China Evergrande Group, causing concerns in China’s financial markets as policymakers try to contain the crisis. Trading in shares of China Evergrande, China Evergrande New Energy Vehicle Group, and Evergrande Property Services was halted.

A Hong Kong court on Monday ordered the liquidation of China Evergrande Group, a move likely to send ripples through China’s crumbling financial markets as policymakers scramble to contain the deepening crisis.

Evergrande defaulted on offshore debt in late 2021, becoming a symbol of the debt crisis that has engulfed China’s property sector. The world’s most indebted developer has around $300 billion of liabilities and $240 billion of assets. The liquidation petition was first filed in June 2022 by Top Shine, an investor in Evergrande unit Fangchebao which said the developer had failed to honour an agreement to repurchase shares it had bought in the subsidiary.

Evergrande had been working on a $23 billion debt revamp plan for two years. * Its original plan was scuppered in late September when it said its billionaire founder Hui Ka Yan was under investigation for suspected crimes. An ad hoc bondholder group had been siding with the developer in opposing the liquidation petition until the last hearing in early December.

Key Points:

  • A Hong Kong court has ordered the liquidation of China Evergrande Group, causing concerns in China’s financial markets as policymakers try to contain the crisis
  • Trading in shares of China Evergrande, China Evergrande New Energy Vehicle Group, and Evergrande Property Services was halted
  • The liquidation petition was first filed in June 2022 by Top Shine, an investor in Evergrande unit Fangchebao which said the developer had failed to honour an agreement to repurchase shares it had bought in the subsidiary
  • Evergrande had been working on a $23 billion debt revamp plan for two years. Its original plan was scuppered in late September when it said its billionaire founder Hui Ka Yan was under investigation for suspected crimes
  • An ad hoc bondholder group had been siding with the developer in opposing the liquidation petition until the last hearing in early December
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