File photo: The sign for the China Evergrande Center building can be seen on September 23, 2021 in Hong Kong, China.Reuters / Tyrone Shiu
October 4, 2021
Hong Kong (Reuters) – A large sum on Monday, days after some bondholders said real estate developers amid turmoil over China’s financial system missed the payment of the second major bond interest rate. Trading in indebted Chinese Evergrande shares has been suspended.
According to the Hong Kong Stock Exchange, shares in its unit, Evergrande Property Services Group, have also been suspended. The exchange did not say why trading in the company’s shares was suspended, and it was not clear who initiated the suspension.
Evergrande did not immediately respond to the request for comment.
With hundreds of billions of dollars in debt, equivalent to 2% of China’s gross domestic product, Evergrande has raised concerns that the problem will spread throughout the financial system and around the world. Initial concerns eased somewhat after China’s central bank pledged to protect the interests of homebuyers.
Monday’s stock market crash rocked the broader financial markets, which remained nervous about the transmission, lowered the offshore yuan slightly and squeezed the Hansen benchmark, especially financials and others. developers. Guangzhou R & F Property Co., Ltd. fell 7%, Sunac China Holdings and Country Garden fell 4% each.
Evergrande’s stake has fallen 80% so far this year, but its real estate services industry has slumped 43% as the group scrambled to raise funds to pay numerous lenders and suppliers.
Shares of electric vehicle division China Ever Grande New Energy Vehicle Group lost after falling 8% on Monday morning.
The cash-strapped group announced on September 30 that its wealth management division had repaid 10% of its wealth management products (WMP), which are mostly held by onshore retail investors.
Once the best-selling real estate developer in China and now set to undergo the biggest restructuring in the country, Evergrande has favored domestic creditors over offshore bondholders.
The two offshore payments that bondholders say have not reached their due date are owed to the company, which has nearly $ 20 billion in offshore debt, faced a deadline for a total of $ 162.38 million in dollar bond coupon payments the following month. ..
Beijing told Reuters last week it had urged state-owned companies and state-owned real estate developers to buy some of Evergrande’s assets and was directly or indirectly investigating the purchases.
At the same time, Chinese real estate group Hopson Development said in a statement Monday that it had suspended trading in shares pending Hopson’s announcement of a major takeover of a Hong Kong-listed company and the possibility of a binding offer.
It was not clear whether the transaction was related to the Evergrande group and Hopson declined to seek further comment.
Hopson’s stock, with a market value of HK $ 60.4 billion ($ 7.8 billion), has skyrocketed 40% so far this year.
($ 1 = HK $ 7.7868)
(Report by Anne Marie Roantree and Donny Kwok, supplementary report by Tom Westbrook in Singapore, edited by Kim Coghill and Kenneth Maxwell)