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HomeLatest NewsEvergrande denies that its application to a US court implies bankruptcy

Evergrande denies that its application to a US court implies bankruptcy

Date: May 29, 2024 Time: 18:13:50

After turning on all the alarms in the sector. The indebted Chinese real estate giant Evergrande assured this Friday that its recent application to a US court is “a normal process in the framework of the restructuring of its foreign debt” and that it does not imply “a declaration of bankruptcy.”

Evergrande explained that because its dollar-denominated debt is under the jurisdiction of New York, it has filed for bankruptcy under Chapter 15 in that city, according to a statement sent to the Hong Kong Stock Exchange, where it is listed. The request would “acknowledge and give effect to the arrangement for the assignment of its foreign debt in Hong Kong and the British Virgin Islands,” the realtor said.

Chapter 15 of the US bankruptcy code allows foreign companies undergoing restructuring to suspend payments on their international debts in the United States. Evergrande subsidiary Tianji Holdings also filed for chapter 15 protection in New York.

The real estate company has spent months trying to negotiate a restructuring plan with its creditors that will allow it to get out of business. Its creditors are called to a meeting with the company on August 23 and 24, a meeting during which they will vote on the proposed restructuring plan for its almost 20,000 million dollars (about 18,000 million euros) of ‘offshore’ debt.

Losses of 66,409 million dollars

Evergrande lost net attributed 476,035 million yuan (66,409 million dollars, 59,051 million euros) in 2021 and 105,914 million yuan (14,775 million dollars, 13,138 million euros) in 2022. In 2022, the company had a turnover of 230,067 million of yuan (32,084 million dollars, 28,529 million euros), which represents a drop of almost 8% compared to 2021 and of close to 55% compared to 2020, which was its last year before definitively entering iva In crisis.

Frozen on the Hong Kong Stock Exchange

Evergrande’s listing on the Hong Kong Stock Exchange was frozen on March 21, 2022, although some of its subsidiaries resumed trading their shares in recent weeks.

The financial position of many Chinese real estate companies worsened after, in August 2020, their growth in aggressive leverage policies.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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