China Evergrande, the world’s most indebted property developer, has filed for chapter 15 bankruptcy protection in the us, alongside its affiliate Tianji holdings.
This protective measure temporarily shields non-US companies undergoing restructuring from creditors in the US. The move follows fears of the crisis spreading in China’s property sector, which has seen 40 percent of companies default on their home sales since mid 2021. With liabilities of 330 billion dollars, Evergrande’s late 2021 default triggered a ripple effect, resulting in several unfinished housing projects.
The company’s filing also seeks recognition of its ongoing restructuring talks in Hong Kong, the Cayman Islands, and the British Virgin Islands. It has scheduled a chapter 15 recognition hearing for September 20th. However, recent losses totalling 81 billion dollars for 2021 and 2022 have stirred investor concerns about the company’s proposed debt restructuring plan.