(Bloomberg) — China’s Evergrande Group filed for Chapter 15 bankruptcy protection in New York on Thursday, in a move that shields its US assets from creditors while it works on a restructuring deal elsewhere.
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The China Homebuilder’s Chapter 15 petition cites restructuring actions being carried out in Hong Kong and the Cayman Islands. Its Viewer’s Journey unit has also filed for Chapter 15 protection, along with subsidiary Tianji Holdings.
International debt restructuring deals sometimes require a Chapter 15 filing in the course of completing the transaction. Last year, Beijing-based developer Modern Land China filed for Chapter 15 bankruptcy after filing for $250 million bond repayments saying it would move forward with an offshore debt restructuring deal.
Evergrande has been working for months to finalize its foreign debt restructuring plan. Evergrande revealed in April that it did not have the level of creditor support required to implement the plan. In July, it received court approval to hold a vote on the deal. The meetings are scheduled for later this month.
Read more: Evergrande’s creditors have seized a $1.6 billion tower they can’t sell
Evergrande defaulted on a dollar bond for the first time in December 2021 after months of uncertainty about its finances. The company’s struggles helped trigger the initial wave of concerns about China’s real estate sector that have continued to grow.
Evergrande’s bankruptcy attorney did not immediately respond to a request for comment.
The case is China Evergrande Group and Jimmy Fong, 23-11332, US Bankruptcy Court for the Southern District of New York (Manhattan).
— With assistance from Jonathan Randles and Stephen Church.
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