Real estate: Stock-up for China’s crisis converter Evergrande

For China’s highest indebted real estate group Evergrande, after around 15 years there is an end to the stock exchange. The trading center in the Chinese special administrative region Hong Kong stroked the crisis -beamed developer from his list to start trading. The company failed the deadline set by the stock exchange for the resumption of the trade of its shares, it said in a message.

The trade in the papers has been suspended since January 29, 2024 because a court in Hong Kong had decided to smash Evergranden after a lawsuit from foreign creditors. The company’s mountain of debt was around $ 300 billion (currently around 256 billion euros).

From the building leap to the crisis symbol

The Evergrand Group was the flagship company during China’s construction boom. The industry contributed around a fifth to economic output. In the meantime, Evergrand is a symbol of China’s real estate crisis, which has been slowing down the country’s economic engine since 2021 and shaking consumption trust among the population.

The once largest real estate developer from southern China, who also belonged to the Guangzhou FC Football Association for a few years, had a brilliant start of the stock exchange in 2009 and then multiplied its market value. At best times Evergrande managed around 1,300 construction projects in 280 Chinese cities. Company boss Hui Ka Yan at times became the richest man in China.

Beijing changes credit rules

In 2020, however, the company faltered when the central government in Beijing made real estate developers with new regulations to take out loans. As a result, Evergrande subsequently had problems to serve its creditors and could no longer complete the apartments that have already been paid but not yet built. The anger among the property owners concerned was great. The authorities began to investigate Hui. In March 2024, the stock exchange supervision sustained him from stock trading in China for life.