In the real estate crisis in China, a court in Hong Kong has reportedly ordered the dissolution of the heavily indebted China Evergrande company. Judge Linda Chan made a corresponding judgment on Monday (local time) in the Chinese special administrative region, as several media outlets unanimously reported. The proceedings had previously been postponed several times. It is expected that an interim insolvency administrator will be appointed.
Creditors had sued the court because China Evergrande repeatedly missed payments. The company had previously tried to avert liquidation with a restructuring plan. The hearing lasted a year and a half and the company is still unable to put forward a concrete proposal for restructuring, Chan said South China Morning Post reported. “I think it’s time for the court to say enough is enough,” she said.
The group, which is listed on the Hong Kong stock exchange, is the world’s most indebted property developer, with the equivalent of more than 300 billion US dollars. The settlement is likely to further reduce confidence in the struggling real estate market of the world’s second-largest economy and cause turbulence on the stock market, which the government recently tried to stabilize again. On Monday, the securities of subsidiaries of the Evergrande Group were suspended from trading. Other companies in the Chinese real estate industry are also heavily indebted and sometimes fight with creditors in court.