(NEW YORK) Heavily indebted Chinese real estate giant Evergrande on Thursday requested to be placed in bankruptcy proceedings in the United States, a move intended to protect its American assets, according to court documents Thursday, but its debt restructuring agreement was found to be in place.
The American system known as “Chapter 15” aims to provide mechanisms to handle bankruptcy cases involving more than one country.
Private conglomerate Evergrande is struggling with more than $300 billion in debt in 2021 as Chinese authorities tighten their grip on the real estate sector.
Evergrande has become a symbol of the crisis in China’s private real estate sector, which is struggling with builders unable to complete their projects and facing a multiplication of legal processes and refusals from landlords to repay their debt. .
For several months, the group has been working on a plan to restructure its debt and earlier this year made a proposal in this direction.
The promoter has indicated that it is exclusively proposing to its lenders to swap debt for new bonds and stakes in two subsidiaries, including its flagship electric vehicle division.
The former No. 1’s troubles in real estate have raised fears of its collapse in 2021 and contagion risks that could shake the world’s second largest economy.
According to the latest documents submitted, ongoing restructuring processes are underway in Hong Kong.
In July, Evergrande Group announced a net loss of more than $113 billion for 2021 and 2022.
Beijing has recently unveiled measures to revive the vital real estate sector, including keeping credit support in place and cutting red tape.