World's most indebted developer ordered to liquidate more than $300 billion in debt

A Hong Kong court on Monday ordered the liquidation of China Evergrande Group, the world's most indebted developer, after the company's failed effort to restructure its more than $300 billion in liabilities. 

The liquidation order is a blow to China's ailing property market after China Evergrande failed to come to an agreement with its foreign creditors on restructuring its debts during 19 months of negotiations after the real estate giant defaulted on its debts more than two years ago, according to CNN.  

Judge Linda Chan said in the ruling that she believes that allowing independent liquidators to take control of the company will better protect creditors' interests.

"It is time for the court to say enough is enough," Chan said in court, according to Reuters. Chan said the ruling is appropriate considering Evergrande's insolvency and its "lack of progress" in "putting forward a viable restructuring proposal."

The liquidation process is expected to be long and complicated, with a focus on whether Chinese courts will recognize the ruling from the Hong Kong court. Additionally, offshore investors are expected to closely watch China's treatment of foreign creditors when a company is liquidated. 

Monday's order is likely to have less of an immediate impact on Evergrande's operations in mainland China and more of an effect on the confidence of foreign investors in the country's markets, according to Brock Silvers, a managing director at Kaiyuan Capital, a China-based private equity real estate company.

"So onshore, Evergrande tomorrow will look a lot like Evergrande yesterday, there won’t be a lot of noticeable difference," he said, according to The Associated Press. 

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