The steepening downturn in China’s real-estate markets has led China Evergrande to scrap a $35 billion debt-restructuring plan designed to ensure the property developer’s survival, a sign that China’s ongoing housing crisis could still get worse, WSJ Pro Bankruptcy reported. China Evergrande, among the largest property developers in China, popped the country’s real-estate bubble in 2021 when it spiraled into insolvency and set off a chain of developer defaults. Evergrande’s parent company was on the verge of a restructuring deal with its creditors when the Chinese housing industry sputtered yet again in recent months. Now, Evergrande’s plan to stay alive is falling apart. In a securities filing on Friday, Evergrande said it needed to scrap its restructuring plan because of worse-than-expected property sales and would look for another path forward that “reflects the company’s objective situation.” Evergrande also said in the filing that it has started initial talks on renegotiating the plan with its creditors, including Chinese banks and international bondholder groups. Without a new deal, bondholders who lent around $15 billion to Evergrande could pursue a liquidation of the company and put more pressure on an already-anemic real-estate market in China. Read more.
