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Chinese property giant Evergrande asks US court to approve debt plan

A cement truck moves past a new Evergrande housing development in Beijing on Sept. 22, 2021.
A cement truck moves past a new Evergrande housing development in Beijing on Sept. 22, 2021. Copyright Andy Wong/Copyright 2021 The AP. All rights reserved
Copyright Andy Wong/Copyright 2021 The AP. All rights reserved
By Euronews with AP
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Evergrande ran short of cash after Beijing tightened controls in 2020 on corporate debt the ruling Communist Party worries is dangerously high. Some other developers collapsed, leaving half-finished apartment blocks standing empty.

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A giant Chinese real estate developer that is struggling to avoid defaulting on $340 billion in debt said Friday it is asking a US court to approve a restructuring plan for foreign bondholders and rejected what it said were news reports that suggest it filed for bankruptcy.

Evergrande Groupe’s mountain of debt prompted fears in 2021 of a possible default that might send shockwaves through the global financial system. China’s government has tried to reassure investors that its problems are contained and that lending markets will be kept functioning.

The request Thursday under Chapter 15 of the US bankruptcy code is “a normal step in the overseas restructuring procedure and doesn’t involve bankruptcy filings,” the company said in a statement issued in Hong Kong. It cited unspecified “media reports” and said it was clarifying the situation.

The company said it negotiated a restructuring with investors in its US dollar-denominated bonds under the legal systems of Hong Kong and the British Virgin Islands but needs approval from a bankruptcy court in New York City because they are governed by New York state law.

Ng Han Guan/Copyright 2022 The AP. All rights reserved.
The entrance to the Evergrande Shanghefu residential complex under construction is seen in Beijing, China, Tuesday, Jan. 4, 2022.Ng Han Guan/Copyright 2022 The AP. All rights reserved.

Evergrande ran short of cash after Beijing tightened controls in 2020 on corporate debt the ruling Communist Party worries is dangerously high. Some other developers collapsed, leaving half-finished apartment blocks standing empty.

Evergrande said it had more assets than debt but had trouble turning slow-selling real estate into cash to repay creditors.

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