China's real estate giant Evergrande was ordered on Monday to liquidate, after it failed to present creditors a viable restructuring plan for its debts.
Judge Linda Chan at a Hong Kong court said it was appropriate for the court to order the company to wind up its business given a "lack of progress on the part of the company putting forward a viable restructuring proposal" as well as Evergrande's insolvency.
Fergus Saurin, a lawyer representing an ad hoc group of creditors, said he was not surprised by the ruling.
"The company has failed to engage with us. There has been a history of last-minute engagement which has gone nowhere," he said. "The company has itself to blame for being wound up."
Why is Evergrande in financial trouble?
Once China's top-selling property developer, Evergrande slipped into public financial woes in 2021, defaulting on its offshore financial obligations after Chinese regulators tightened the noose on excessive borrowing in the real estate sector.
The crisis brought Evergrande to the center of an unprecedented liquidity crisis in the property sector, which makes up roughly a quarter of China's economy.
The company has become the world's most indebted real estate developer as a result.
However, it is not the only developer to have suffered from Beijing's crackdown on excessive borrowing within the sector.
Evergrande had previously said it was attempting to "refine" a new plan that would restructure liabilities amounting to more than $300 billion (roughly €276.6 billion). In December, it was granted a brief reprieve, but that proved short lived.
Judge Chan said on Monday that the court at the previous hearing in December had "made it very clear it expected to see a fully formulated and viable proposal."
rmt/sri (AFP, AP, Reuters)