Trading in shares of struggling Chinese real estate giant Evergrande was suspended on the Hong Kong Stock Exchange (HKEX) on Monday as the world’s most indebted developer missed consecutive interest payment deadlines and continues its attempts to reimburse investors.
“Trading in China Evergrande group shares will be halted at 9 am today,” a regulatory filing with HKEX said, without giving any reason. “As a result, all structured products relating to the company will also be suspended from trading at the same time.”
HKEX did not specify the reasons for the shutdown or who initiated the suspension. However, this heightened speculation about a possible acquisition of the company’s property management unit, as the cash-strapped company attempted to raise funds to meet its dues.
Cailian, a Chinese online news service affiliated with the public newspaper Titles timesaid another developer, Hopson Development Holdings, considering acquiring a controlling stake in Evergrande Property Services Group.
Trading in Hopson’s shares was also suspended Monday in Hong Kong, “pending the release of announcement (s) regarding a major company transaction whereby the company agreed to acquire the shares of a company. (…) listed on the stock exchange, ”he said in a file.
It is not yet clear whether the Hopson acquisition announcement relates to Evergrande. However, Reuters The news agency reported that the Chinese government – which has so far avoided helping one of the country’s biggest developers with a bailout – is hoping asset purchases can be a way out for the company.
As China’s second-largest developer, Evergrande is often referred to as “too big” for the country to let it collapse. However, with $ 300bn (£ 221bn) in debt, the company is in a major crisis, missing interest payment dates and seeing the value of its shares plummet by more than 80% over the course of the last year.
The heavily leveraged real estate giant missed another interest payment on an offshore bond last week, a second default the same month. He was due to pay foreign bondholders $ 47.5million (£ 35million) by Wednesday.
However, the company has provided some relief to stock investors who fear the domino effect of Evergrande’s collapse in Chinese and global markets, when it settled a national bond payment earlier and sold a stake. $ 1.5 billion in a Chinese regional bank last week.
“Looks like the property management unit is the easiest to sell in the grand scheme of things, indicating that the company is trying to generate short-term liquidity,” OCBC analyst Ezien told Reuters Hoo.
“I’m not sure that necessarily means the company has given up on surviving, especially since selling an asset means they’re still trying to raise money to pay the bills.”
Authorities’ push has worked, Reuters said, and a handful of state-owned companies have already done their due diligence on Evergrande’s assets in the southern Chinese city of Guangzhou.
Potential buyers of Evergrande’s main assets in Guangzhou have been “arranged” with “both political and business considerations in mind,” Reuters said, citing a source, adding that authorities do not want to see a few companies. bid for the same assets.
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This notice was published: 2021-10-04 07:22:35