China Evergrande granted one last chance on debts

STORY: Troubled Chinese property giant Evergrande has been granted one last chance. On Monday (October 30), a hearing to wind up the company was adjourned until December 4. A Hong Kong judged ruled this was the company’s final opportunity to come up with a restructuring plan. If it fails, Evergrande will probably face liquidation. The giant developer has over $300 billion in liabilities, and defaulted on its offshore debt in 2021. It’s become the symbol of a crisis that has engulfed China’s real estate sector, which accounts for about a quarter of the country’s economy. That leaves investors around the world worried what might happen if giant companies like Evergrande face a chaotic collapse. Now the court says the developer has to come up with a revised restructuring plan before the December hearing. Its previous plan was thrown into doubt last month after news that the firm’s founder was under investigation for criminal activities. Evergrande has also been barred from issuing new debt due to a probe into its flagship property unit. One lawyer for a major group of creditors said they supported the court adjournment, saying they would still prefer a restructuring to liquidation. Evergrande did not respond to a request for comment.