China's Evergrande Faces Over 1,300 Lawsuits Totalling $45 Billion: Report

Embattled Chinese real estate group Evergrande is facing 1,317 lawsuits with a combined claims of about $45.1 billion, according to a report in Nikkei Asia. The outlet cited a company statement in which it disclosed pending litigation with claims of more than $4.3 million. Evergrande, the world's most indebted property developer with $300 billion of total liabilities, has been at the centre of a debt crisis that has seen multiple Chinese developers default over the past year and seek to restructure debt.

Nikkei Asia said most of the lawsuits are likely from builders and materials suppliers demanding payment.

By the end of March, the company reported 154 cases of asset freezes at local affiliates, the outlet further said.

Evergrande began to falter after China began cracking down on the property sector in 2020. The company decided to restructure by arranging a debt workout with local governments.

Earlier this month, the company announced a restructuring plan for its offshore debt. Evergrande said that 77 per cent holders of class-A debts and 30 per cent holders of class-C debts have submitted their respective support for the restructuring proposal, among others.

On Thursday, it extended the deadline for receiving an incentive for its debt restructuring proposal to May 18.

In China, the majority of new properties are paid for even before construction begins.

The property market experienced its "worst-ever slump" last year, with sales down 24 per cent, Rosealea Yao of Gavekal-Dragonomics, a Beijing-based economic consultancy firm, was quoted as saying by news agency AFP.

The Covid-19 pandemic was an aggravating "anxiety" factor, causing many potential buyers to postpone purchasing a property, Yao added.

The sector has also been hit by some homeowners refusing to pay their monthly mortgage payments after getting fed up with developers downing tools over a lack of cash.