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Chinese Creditors Reportedly Sue Evergrande Over Repyments

Editorial Staff

17 December 2021

Chinese creditors have sued China’s for more than $13 billion in allegedly overdue payments, as domestic companies owed money by the debt-laden property developer compete with foreign bold-holders to win back payment, the Financial Times reported.

A Chinese court assigned to handle civil lawsuits against Evergrande has accepted 367 cases with claims totalling Rmb84 billion ($13.2 billion), according to official records reviewed by the newspaper.

The report said that claims were submitted between 24 August and 8 December, when the group was declared to be in “restricted default” by Fitch Ratings. 

Evergrande’s plight has rattled domestic and overseas investors, concerned that over-leveraged real estate in China is one of several cracks in the country’s economy. China’s central bank has twice this year cut its reserve requirement ratio on banks to aid financial liquidity. Meanwhile, the US Federal Reserve and Bank of England are moving in the opposite direction with faster “tapering” of quantitative easing in the Fed’s case, and a small hike in interest rates (BoE). China has cracked down on several sectors and moved this year to reduce leverage in the real estate sector, although the Evergrande saga has caused a partial reverse of policy.