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China property giant Evergrande suspends share trading again

China property giant Evergrande suspends share trading again

A man walks pass the signage of the China Evergrande Centre in Hong Kong on Oct 21, 2021. (Photo: AFP/File/Bertha WANG)

HONG KONG: Troubled Chinese property developer giant Evergrande and all its units suspended trading in Hong Kong Monday morning (Mar 21), according to a notice to the stock exchange.

China's property firms have struggled in the wake of Beijing's drive to curb excessive debt in the real estate sector, as well as rampant consumer speculation.

Among those embroiled in the crisis is Evergrande, one of the country's largest developers, which has been involved in restructuring negotiations after racking up US$300 billion in liabilities.

On Monday, the company announced that trading will be "halted" without giving a reason.

"Accordingly, all structured products relating to the company will also be halted from trading at the same time," said a notice to the Hong Kong Stock Exchange.

Shares of Evergrande Property Services Group and China Evergrande New Energy Vehicle Group were suspended.

The suspension - the second this year - comes ahead of an expected US$2 billion repayment obligation on Wednesday, and another next month of US$1.4 billion.

Evergrande has been struggling to repay its suppliers and creditors and complete projects and homes.

Its flagship unit Hengda Real Estate Group Co Ltd secured approval from its onshore bondholders over the weekend to delay a coupon payment due last September to September 2022, according to the company lawyer's filing to the Shenzhen Stock Exchange on Sunday.

Hengda held a meeting with creditors of the 4 billion yuan (US$629 million) 2025 bond on Mar 18-19 to approve the payment of interests incurred between September 2020 to September 2021 to be made in September 2023.

Evergrande has so far avoided technical bond defaults onshore, although it has missed payments on some offshore bonds.

The embattled developer was labelled as being in default by international ratings firms in December after it failed to repay liabilities on time.

Earlier struggles to pay suppliers and contractors due to the debt crisis led to sustained protests from home buyers and investors at the group's Shenzhen headquarters in September.

The company has repeatedly said it will finish its projects and deliver them to buyers in a desperate bid to salvage its debts.

But in January it was ordered by authorities to tear down 39 buildings on Hainan island because the structures were built illegally on an artificial archipelago in the tourist hub.

The firm has tried to sell assets, with chairman Hui Ka Yan paying off some of the debts using his own personal wealth.

Evergrande's woes have had knock-on effects throughout China's property sector with some smaller firms also defaulting on loans and others struggling to find enough cash.

The International Monetary Fund warned in late January that the property funding crisis could have spillover effects on the broader economy and global markets.

Evergrande shares traded at HK$1.65 before the suspension. They have gained 3.8 per cent this year after plunging 89 per cent in 2021.

Source: Agencies/gs


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