In the real estate crisis in China, a court has reportedly ordered the dissolution of the heavily indebted China Evergrande company. Judge Linda Chan made a corresponding judgment on Monday (local time) in Hong Kong, 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 come up with a concrete restructuring proposal, Chan said South China Morning Post reported. “I think it’s time for the court to say enough is enough.”
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 in China, the world’s second-largest economy, and trigger turbulence on the stock market, which the government only recently tried to stabilize. 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.