A Hong Kong court has ordered the liquidation of Evergrande, a leading Chinese development company, after a prolonged 18-month hearing.
The court's decision, delivered by Justice Linda Chan, comes as Evergrande, recognized as the world's most indebted property developer with approximately $300 billion in liabilities, failed to present a feasible restructuring plan.
Justice Chan made the ruling on Monday morning, saying: “it is time for the court to say enough is enough”.
Despite being granted seven extensions since the initiation of court proceedings in June 2022, the company's restructuring efforts, including a $23 billion debt revamp plan, proved unsuccessful.
Evergrande's executive director, Shawn Siu, expressed disappointment over the ruling but emphasized the company's ongoing operations in mainland China, noting that the Hong Kong division operates independently from its mainland counterpart.
The ruling's impact on Evergrande's home-building sector remains uncertain, yet the company's struggles have already left numerous home buyers awaiting their properties.
This latest court decision is expected to have broader implications for China's financial markets, which are already grappling with efforts to stabilize a faltering stock market.
The company's shares plunged over 20% in Hong Kong following the announcement, leading to a suspension of trading.
The fallout from Evergrande's crisis deepened in September when the company revealed that its founder, billionaire Hui Ka Yan, was being investigated for suspected illegal activities.
In response to the liquidation order, provisional liquidators will be appointed to manage Evergrande's assets, negotiate debt restructuring with creditors, and oversee the company's operations.