(CNN) — A Hong Kong court ordered the liquidation of Evergrande Group, the world's most indebted real estate firm, on Monday, Chinese media reported.
The liquidation order comes after the troubled Chinese property firm and its foreign lenders failed to reach an agreement on how to restructure the company's massive debt. According to the court's website, the court will hold another hearing later in the afternoon to “regulate the order,” which could lead to the appointment of a liquidator for Evergrande.
The Shenzhen-based developer is an example of the Chinese real estate crisis from 2021. Total liabilities stood at over USD 328 billion at the end of June last year. Last September, its founder and chairman Xu Jiayin was named as a suspect in “crimes” and arrested by police.
Evergrande, once China's second-largest real estate developer, defaulted on its financial obligations to creditors by late 2021, triggering a crisis in the real estate sector that continues to weigh on the broader economy. A former Chinese official said last year there were more vacant properties than China's total population of 1.4 billion.
— Lucas Liliholm contributed reporting.
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