Evergrande's Debt Woes Send Shockwaves Through China's Property Market

Concerns over China's property sector resurfaced as obstacles to China Evergrande Group's debt restructuring plan and a court order for winding up China Oceanwide Holdings rattled investors. Evergrande, the world's most indebted developer, has been seeking creditor approval for an offshore debt restructuring after defaulting in 2021. However, an ongoing investigation into its main domestic subsidiary has prevented Evergrande from issuing new debt. The latest developments have dashed hopes of a meaningful recovery for Evergrande debt holders, but liquidation is unlikely as the government prioritizes the timely delivery of pre-sold homes. The setbacks in Evergrande's restructuring plan add to the growing list of winding-up petitions against Chinese developers, exacerbating the liquidity crunch in the sector.