China’s Evergrande Files For Bankruptcy Protection In The U.S.
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The resilience of China’s economy is in question once again after Evergrande Group (EGRNF) – its real estate behemoth filed for Chapter 15 bankruptcy protection in the United States on Friday.
Evergrande had defaulted in 2021
The property giant had announced a program to restructure its offshore debt last year that followed its default in December of 2021.
Trading in Evergrande Group has remained suspended over the past eighteen months. In its statement this morning, the construction company revealed to have:
Applied for recognition of schemes of arrangement under offshore debt restructuring for Hong Kong and British Virgin Islands. The application is a normal procedure and doesn’t involve bankruptcy petition.
The stock market news arrives shortly Evergrande said it narrowed its loss sharply in 2022 as it continued to limit costs.
Is China’s Country Garden also at risk?
On Friday, Tianji Holdings and Scenery Journey filed for Chapter 15 bankruptcy protection in the Manhattan court as well. Tianji is an affiliate of China’s Evergrande and Scenery Journey is one of the subsidiaries of Tianji Holdings.
Earlier this week, GimmeCredit also downgraded the bonds of Country Garden Holdings – another one of Chinese real estate companies to “deteriorating”. According to Jim Cramer:
When I hear about another crisis in China, all I can think is, been there done that. China is dubious distinction being considered by many the most powerful country on Earth but also the shakiest financial system.
China’s economy grew at an annualised pace of 6.3% in Q2 versus 6.9% expected.
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