296
submitted 7 months ago by [email protected] to c/[email protected]

A Hong Kong court ordered the liquidation of China Evergrande, the world's most indebted property developer.

Evergrande has assets of about $245 billion, but owes about $300 billion.

Its demise is a "controlled collapse," but still raises systemic risk and will hurt investors, says an analyst.

you are viewing a single comment's thread
view the rest of the comments
[-] [email protected] 4 points 7 months ago

This is the best summary I could come up with:


But there are still concerns about how Evergrande's fallout will affect the broader market, since the property sector contributes to about one-quarter of China's GDP.

The court has appointed Alvarez and Marsal as liquidator to manage the company, Evergrande said in a filing to the Hong Kong Stock Exchange.

"Onshore stakeholders are busy working to ensure home purchasers will eventually receive the homes they have paid for one way or another, but retail 'mom and pop' investors in the company's offshore securities will be facing even further uncertainty and delay which would likely continue for years," Daniel Margulies, a partner at Dechert, a law firm that specializes in restructuring in Asia, told BI.

In July, Evergrande cited an analysis by Deloitte that estimated a recovery rate of 3.4% on its debt if the company is liquidated, per Reuters.

Debtwire data showed 32 developers in China managed to complete 42 restructuring processes covering 104 tranches of offshore bonds worth $33.1 billion from July 2021 — around the time the current property crisis started — to the end of October 2023.

"Evergrande's liquidation is a sign that China is willing to go to extreme ends to quell the property bubble," Andrew Collier, a managing director at Orient Capital Research, told Reuters.


The original article contains 1,049 words, the summary contains 209 words. Saved 80%. I'm a bot and I'm open source!

this post was submitted on 03 Feb 2024
296 points (97.4% liked)

World News

38558 readers
2803 users here now

A community for discussing events around the World

Rules:

We ask that the users report any comment or post that violate the rules, to use critical thinking when reading, posting or commenting. Users that post off-topic spam, advocate violence, have multiple comments or posts removed, weaponize reports or violate the code of conduct will be banned.

All posts and comments will be reviewed on a case-by-case basis. This means that some content that violates the rules may be allowed, while other content that does not violate the rules may be removed. The moderators retain the right to remove any content and ban users.


Lemmy World Partners

News [email protected]

Politics [email protected]

World Politics [email protected]


Recommendations

For Firefox users, there is media bias / propaganda / fact check plugin.

https://addons.mozilla.org/en-US/firefox/addon/media-bias-fact-check/

founded 1 year ago
MODERATORS