Evergrande Liquidation Is a Big Test for International Creditors
- It’s unclear whether mainland courts will follow the order
- Unfavorable outcome risks deepening investor pessimism
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China Evergrande Group’s liquidation order by a Hong Kong court cements the downfall of a company that exemplified the country’s real estate boom and bust. For global investors, what happens to the remnants will have implications far beyond one property developer.
Key is whether Monday’s ruling will be followed in mainland China, which has a separate legal system. While Evergrande’s shares and dollar bonds are traded in Hong Kong, the bulk of Evergrande’s $242 billion of assets are located in the mainland.