Evergrande lost almost $2.4 billion of its value on Monday and mistrust persists in the market. Evergrande is the most indebted real estate developer in the world.
Chinese stocks Evergrande Group They plummeted 87% this Monday when the listing resumed after 17 months of suspension, which meant the loss of almost $2.4 billion of its value, after stating that it had “adequately” complied with all the guidelines issued by the Stock Exchange. From Hong Kong.
Evergrande, the real estate developer most indebted in the worldis in the center of a Chinese real estate crisis that accumulates a chain of debt defaults since the end of 2021. Next month, the courts will decide on Evergrande’s plan to restructure almost US$32,000 million in debt obligations foreign debt.
Hong Kong-listed shares traded as high as HK$0.22 on Monday and their market capitalization fell to HK$2.9bn ($369.73m), from HK$21.8bn ($2.78bn) at its previous close. The assessment had reached a all-time high close to 420 billion Hong Kong dollars in 2017.
Evergrande: why it was suspended in the stock market
The share had been suspended since March 21, 2022. Its Hong Kong-listed units China Evergrande New Energy Vehicle Group and Evergrande Property Services Group resumed listing last month after a 16-month hiatus.
The resumption of listing of the three companies is crucial to Evergrande Group because its offshore debt restructuring plan includes swapping part of the debt for equity-backed instruments.
Evergrande would have faced delisting if the suspension had reached 18 months.
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Evergrande: what the market expects
“Looking ahead, things will continue to be difficult for both their operations and their share performance,” said Steven Leung, a director at UOB Kay Hian in Hong Kong.
“There is little hope that Evergrande can rely on home sales to pay down the debt, because homebuyers would prefer state developers and will not be able to benefit from stimulus policies“.
The resumption of operations also came after the developer on Sunday reported a lower net loss in the first half of the year due to higher revenues.
Courts in Hong Kong and the Cayman Islands will decide in early September whether to approve a restructuring plan of offshore debt that includes $31.7 billion in instruments such as bonds, warrants, and repurchase obligations.
Source: Ambito
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