2023-08-18 08:45:04
The heavily indebted Chinese real estate giant Evergrande filed for bankruptcy in the United States on Thursday. This measure aims to protect its American assets until an agreement to restructure its debt is reached.
The company has used the American procedure called “Chapter 15”, which aims to provide mechanisms to manage insolvency cases involving more than one country. It protects non-US companies from being sued or seeing some of their assets frozen in the United States.
Private conglomerate Evergrande has been struggling since 2021, with an abysmal debt load of more than $300 billion. It has become the symbol of the crisis of the private real estate sector in China.
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For several months, the group has been working on a project to restructure its debt and made a proposal in this direction earlier this year. In particular, he proposed to his creditors to exchange the debt for new bonds and a stake in two subsidiaries, including his ambitious branch of electric vehicles.
The setbacks of Chinese real estate
Its difficulties in 2021 raised fears of risks of contagion to the rest of the sector and to the Chinese economy, whose gross domestic product depends nearly 30% on the real estate sector.
Concerns crystallized once more this week by the announcement of the fall on the stock market of the developer Country Garden, one of the largest real estate groups in China. This symbol of the Chinese real estate boom is also on the verge of bankruptcy.
>> Read also: One of China’s biggest real estate developers collapses on the stock market
Debted to the tune of 160 billion dollars, the company has four times more sites than Evergrande. And according to the Bloomberg agency, several foreign groups are exposed to its debt, including the bank UBS or the insurer Allianz.
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