Under-fire Chinese real estate developer China Evergrande Group suspended trading in Hong Kong this morning, along with two of its units, according to exchange filings.
Trading in shares of Evergrande Property Services Group and China Evergrande New Energy Vehicle Group was also halted, with no reason being immediately given for the pause.
Evergrande has been the focal point of a cash crisis consuming Chinese property developers of late, and holds the unenviable title of “the world’s most indebted developer”. The move comes after the company announced plans in January to present a preliminary restructuring proposal within the next six months.
Shenzhen-based Evergrande
The group is facing mounting pressure from bondholders and offshore creditors, and is also under pressure to make payments to suppliers and employees as well as struggling to finish work on millions of properties currently under development.
On Sunday, local media reported that Evergrande plans to sell its 30% stake in a Nanjing property company to Avic Trust Co. for an undisclosed sum, and analysts predict further sales to come as the Shenzhen-based group seek to balance the books.
Some creditors have given a bit of breathing space to the company, with Evergrande’s China unit Hengda Real Estate Group being given a 12-month extension until September 2022 to collect their coupon payment on 4bn yuan of bonds, confirmed in a filing by Hengda’s lawyers on Sunday to the Shenzhen Stock Exchange.
US restructuring experts Houlihan Lokey and Hong Kong-based investment bank Admiralty Harbour Capital have been appointed by Evergrande to provide a capital structure assessment, having missed several deadlines to make payments to investors.
Evergrande had appointed US restructuring experts Houlihan Lokey and Hong Kong-based investment bank Admiralty Harbour Capital to assess its capital structure after the property firm failed to pay investors who subscribed to its high yield wealth management products last September.
Evergrande shares were trading at HK$1.65 prior to the suspension. They have gained 3.8% this year following an 89% loss in 2021.