China’s real estate giant Evergrande Group has filed for bankruptcy protection in the United States on Thursday. The company has sought protection under Chapter 15 of the US bankruptcy code, a measure that protects non-US companies undergoing restructurings from creditors that hope to sue them or tie up assets in the United States. Evergrande's affiliate companies, Tianji Holding and Scenery Journey, also filed for Chapter 15 protection in Manhattan bankruptcy court, AFP reported. In 2021, Evergrande was struggling with more than $300 billion in liabilities. It had then first defaulted on its bonds, fanning fears of a contagion.
It led to a string of defaults at other builders, with major developers failing to complete housing projects, triggering protests and mortgage boycotts from homebuyers. Evergrande has been working on an offshore debt restructuring agreement for months. 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, AFP reported. 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.China's policymakers have recently sought to bolster the sector by cutting mortgage rates, slashing red tape and offering more loans to developers.