China’s Evergrande says it is asking for US court to approve debt plan, not filing for bankruptcy

A giant Chinese real estate developer that is struggling to avoid defaulting on $340 billion in debt said Friday it is asking a U.S. court to approve a restructuring plan for foreign bondholders and rejected what it said were news reports that suggest it filed for bankruptcy.

Evergrande Groupe’s mountain of debt prompted fears in 2021 of a possible default that might send shockwaves through the global financial system. China’s government has tried to reassure investors that its problems are contained and that lending markets will be kept functioning.

The request Thursday under Chapter 15 of the U.S. bankruptcy code is “a normal step in the overseas restructuring procedure and doesn’t involve bankruptcy filings,” the company said in a statement issued in Hong Kong. It cited unspecified “media reports” and said it was clarifying the situation.