Shares of the Chinese company Evergrande were suspended from trading after they fell by more than 20% in early trading on Monday, January 29, after a Hong Kong court ruled to liquidate the famous real estate developer, against the backdrop of the debt crisis that strangled the company.
It is noteworthy that Evergrande, which was once one of the largest real estate development companies in the country, has been exposed in the past few years to a debt crisis, due to which it has become the most indebted real estate development company in the world, as it was unable to pay in 2021 and announced an external debt restructuring program. In March of last year.
The Wall Street Journal had previously reported that Evergrande's overseas creditors failed to reach an 11th-hour agreement this weekend to restructure, which could mean imminent liquidation for the real estate developer.
Contain the infection
China's policymakers are striving to stem the debt crisis in the real estate sector, as last week, the People's Bank of China and the Ministry of Finance announced measures to help boost liquidity available to real estate developers.
These measures, which will be in place until the end of this year, will help ease the ongoing cash crunch for Chinese developers after Beijing cracked down on the sector to address ballooning debt levels in the real estate sector.
The Evergrande crisis has raised fears that China's real estate sector contagion will spread to other sectors of the world's second-largest economy.
Country Garden, also one of China's largest property developers, has been struggling to repay its debts, however, and the developer said last month that it may avoid defaulting on its yuan-denominated bonds.
