- Advertisement -
A large group of Evergrande’s offshore creditors are considering joining a liquidation court petition against the developer if it fails to submit a new debt restructuring plan by the end of October.
Shares of embattled Chinese property developer Evergrande surged as trading resumed in Hong Kong after a brief suspension last week.
The company’s shares rose more than 40% initially and remained up another 20% as trading grew. The significant surge comes after a trading freeze was imposed on the company following reports that its billionaire chairman and founder Hui Ka Yan was under police investigation for suspected “illegal crimes”.
Evergrande CEO under police investigation
Evergrande came into limelight on Thursday last week when it exposure That his vehicle was being investigated for suspected illegal activities. The troubled property developer said he was “subject to mandatory measures in accordance with the law due to suspicion of illegal crimes.”
In a statement released on Monday night, the Chinese property developer addressed the situation, saying, “The Board is of the view that there is currently no other inside information regarding the Company that needs to be disclosed.” This clarity from the company contributed to positive investor sentiment around the resumption of business.
While the company’s shares saw an impressive rise of 20.31%, other property stocks listed in Hong Kong had a challenging day. Country Garden Holdings, one of the industry’s major players, declined 7.67%, while Longfor Group Holdings lost 4.82%. New World Development also fared no better, losing 6.69% in its value and Henderson Land Development traded 6.15% lower.
Evergrande’s latest trading halt came just a month after the company reinstated its shares following a 17-month suspension. This resulted in a massive loss of the firm’s share market value, falling almost 99% from July 2020 to HK$0.38 (£0.04).
In a surprising turn of events, the company’s electric vehicle (EV) unit also stopped trading on Tuesday citing an imminent announcement.
Evergrande is facing financial turmoil
China’s largest property developer is struggling with a huge debt burden of US$300 billion ($248 billion). mistake on its offshore loans in late 2021, with increased regulatory scrutiny of the real estate sector. The company’s market valuation is hovering around HK$5 billion ($639.8 million), a sharp contrast to its prior value before the default.
Earlier this year, the company filed For bankruptcy protection in the United States.
The crisis escalated last week when the company’s primary division in China, Hengda Real Estate, defaulted on a 4 billion yuan (£457 million) loan and faced difficulties selling new debt due to the ongoing investigation – which That is an important component of its proposed restructuring plan. ,
A recent report from Reuters revealed that a large group of Evergrande’s offshore creditors are considering joining a liquidation court petition against the developer if it fails to submit a new debt restructuring plan by the end of October Is.
Market analysts are becoming skeptical of the feasibility of the debt restructuring plan, raising concerns that the company may face liquidation. However, a court hearing in Hong Kong on October 30 could determine Evergrande’s fate.
Meanwhile, the ongoing turmoil in China’s property sector has spread beyond Evergrande, with other major developers struggling to complete housing projects, resulting in protests and mortgage boycotts by concerned home buyers. .
Chimamanda is a crypto enthusiast and experienced writer who focuses on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed her interest in emerging economies. She combines her passion for blockchain technology with her love for travel and food, bringing a new and engaging perspective to her work.
Bitcoin Crypto Related Post