Evergrande to declare bankruptcy by the end of 2023?
Market Rules
China’s largest construction company by sales, Evergrande has recorded a recent drop of 29% in its net profit during the first half of 2021. The company’s financial situation is worsening as its debts are estimated at over 300 billion dollars. Evergrande’s chairman recognized in mid-2021 that it faced the risk of defaulting and that it would sell many assets to restabilize its balance sheet.
If Evergrande files for bankruptcy by December 31, 2023, this market will be resolved as “Yes.
Comments
- pedro_brito: I would like to cite a recent market in which something similar occurred as an example. Strong rumors circulated in 2023 that the originally Chinese company Binance might close. Consequently, two markets were created: One of them focused on the company's operations in the US: [ https://Will Binance US shut down by the end of 2023?]( https://Will Binance US shut down by the end of 2023?) The other one addressed the company as a whole: [ https://Will Binance collapse by the end of 2023?]( https://Will Binance collapse by the end of 2023?) The need to create two markets stemmed precisely from the fact that Binance US represented a small fraction of what Binance Global would be. Therefore, if Binance US had collapsed during the past year, that wouldn't have been sufficient to declare the end of the market "Will Binance collapse by the end of 2023."
- pedro_brito: I strongly disagree with the market's resolution. The US operations of the company filed for bankruptcy protection four months ago. The company has not filed for bankruptcy yet. Furthermore, even if the company's request for bankruptcy protection in US is considered a declaration of bankruptcy, it was a bankrupcy protecion regarding the US assets of the company, and its US operation represents a small fraction of the main company, which is the second-largest construction company in Mainland China. In fact, there is a significant ongoing legal process in Hong Kong seeking a forced bankruptcy / liquidation for the entire construction company. In this manner, I believe that the market resolution should be reconsidered. News link: China’s struggling property giant Evergrande files for bankruptcy protection in US - The Guardian Evergrande files for US bankruptcy protection as China economic fears mount - Reuters