Shares in troubled Chinese property giant Evergrande Group (恆大集團) yesterday plummeted nearly 80 percent in Hong Kong after the lifting of a 17-month trading suspension.
The resumption of trading came after the company said in a filing on Friday that it had met guidelines set out by the bourse, including belatedly publishing its financial results and complying with other listing rules.
Once China’s largest real-estate firm, Evergrande defaulted in 2021 and is saddled with more than US$300 billion in liabilities, becoming a symbol of the nationwide property crisis that many fear could spill over globally.
Photo: AFP
Its shares plunged as much as 87 percent during morning trading, slashing its market value from a peak of more than US$50 billion in 2017 to less than US$600 million. It finished the day down 79.4 percent.
The company on Sunday reported fresh losses for the first half of this year amounting to 33 billion yuan (US$4.5 billion) — an improvement on the 66.4 billion yuan in losses reported in the same period last year.
However, its cash assets fell from US$2 billion last year to US$556 million, reflecting its dwindling liquidity.
China’s property market “cooled down significantly” in the first six months of this year and saw new defaults in the sector, “further exacerbating the volatility in the market,” Evergrande said.
“Based on the principles of respecting international restructuring practices and treating the rights and claims of all creditors in a fair and equitable manner, the company steadily pushed forward the work related to the restructuring of its offshore debts,” it said.
In March last year, the Hong Kong stock exchange suspended trading in Evergrande shares after the company failed to publish its 2021 financial results.
Its results for 2021 and last year were published last month, showing a net loss of more than US$113 billion over the two-year period.
Under Hong Kong stock exchange rules, the company risked being delisted if its shares were suspended from trading for 18 months.
Evergrande was supposed to hold creditor meetings yesterday on its offshore debt restructuring proposal, but it announced in the afternoon that the meetings were delayed — just hours before they were set to take place.
The postponement of roughly one month would enable creditors to “consider, understand and evaluate” the plan, the company said in an exchange filing.
The meetings would take place on Sept. 25 or 26, which the developer said was “in line” with the timetable creditors expected.
Evergrande’s plan offers creditors a choice to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group Ltd (恒大物業) and Evergrande New Energy Vehicle Group Ltd (恆大新能源汽車).
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