"The hearing has lasted for one and a half years, and the company still has not been able to bring forward a concrete restructuring proposal [to restructure its $328 billion in liabilities]. I think it is the time for the court to say enough is enough," Justice Linda Chan was quoted as saying by the South China Morning Post newspaper.
The company has the right to appeal the verdict.
Provisional liquidators will now take over the management and affairs of Evergrande. Their tasks will include negotiating debt restructuring with creditors and controlling assets and accounting records in accordance with liquidation procedures in Hong Kong, the newspaper reported. The provisional liquidator is expected to be named later in the day.
The court's ruling, however, faces cross-jurisdictional issues since most of the company’s assets are located in mainland China, according to the report.
Evergrande said in its 2022 annual report that it had over 1,200 projects at different stages of completion. Following the court’s decision, the Hong Kong stock exchange announced the suspension of trading in Evergrande's underlying stocks, futures and options.