Trading in Evergrande’s shares was suspended in Hong Kong on Monday, after Chinese media reported a few days before that the debt-ridden real estate developer would be forced to demolish a residential development in the southern province of Hainan.
The company has been in Full sector crisis Over the past few months, it has been disclosed in documents submitted to the Hong Kong Stock Exchange that the suspension is “waiting for release… an announcement containing inside information.” The company did not add more details.
Evergrande has missed a series of bond payments since September, but had previously transferred the arrears before the end of the 30-day grace period.it is Formally declare a breach of contract In December last year, the rating agency Fitch evaluated its debt after failing to transfer funds that were due at the end of one such grace period.
The company has become the embodiment of huge debts in China’s real estate industry, with more than 300 billion U.S. dollars in debt, and is in a long-term and politically sensitive early stage. Reorganization processBoth the government and investors are concerned about its ability to sustain hundreds of projects.
Evergrande stated in a social media post on December 26 that 92% of its projects have resumed work, up from about half of September, when its crisis triggered an impact on the global market.
Hui Ka YanIts billionaire chairman said in the same post that the company is in an “extremely difficult situation” and its goal is to deliver real estate to the owners. Many real estate developers in China, including Evergrande, sell apartments to buyers before they are completed.
Last weekend, the Chinese media “Cailian” reported that Evergrande was ordered to demolish 39 buildings within 10 days for illegally obtaining a planning permit and was revoked. The article cited a document allegedly from the local authorities of Danzhou City, a city in the northwestern part of the island province.
Trading of Evergrande shares, of which 89% of value lost It was also suspended in October last year. The Hang Seng Mainland Real Estate Index fell 3% in Monday’s trading.
Evergrande has been working hard to solve the problem of interest payments on its international bonds, and its US$19 billion exceeds the interest of any other developer.But in the next few weeks Face the deadline for principal payment.
In December, it established a new risk committee, mainly composed of representatives of state-owned enterprises.
Chinese real estate developers are generally constrained by The number of downgrades hit a record high Last year international rating agencies. Citi analysts pointed out that for listed developers, overall contract sales fell by 1% in 2020, the first drop in history, while Evergrande’s sales fell by 39%.