Chinese Evergrande files for Chapter 15 bankruptcy in Manhattan

NEW YORK: Embattled Chinese property giant Evergrande Group filed for bankruptcy protection in the United States on Thursday, court documents showed, a measure that protects its US assets while it efforts a restructuring deal.

Chapter 15 bankruptcy provides mechanisms for dealing with insolvency cases involving more than one country.

Evergrande, once China's top property developer, was found in 2021 to be struggling with more than $300 billion in liabilities, as officials tightened scrutiny on the real estate sector.

Its liquidity crisis soon made it a symbol of the country's property sector woes.

China's property sector remains in turmoil, with major developers failing to complete housing projects, triggering protests and mortgage boycotts from homebuyers.

Fears of Evergrande's collapse in 2021 sent shudders through the world´s number two economy.

In the latest filings in New York, Tianji Holding and Scenery Journey — of whom Evergrande is the ultimate holding company — also filed for Chapter 15 protection.

For months, Evergrande has been working on an offshore debt restructuring agreement, unveiling a proposal earlier this year.

It offered creditors a choice to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.

Evergrande first defaulted on its bonds in 2021, fanning fears of a contagion.

The latest court documents referenced restructuring proceedings in Hong Kong.

In July, Evergrande reported a net loss of over $113 billion in 2021 and 2022.

Beijing has recently sought to bolster the sector by cutting mortgage rates, slashing red tape and offering more loans to developers.