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China: Property firm Evergrande halts share trading in Hong Kong again

China: Property firm Evergrande halts share trading in Hong Kong again

Evergrande, the second-largest property developer in China, along with its other units has reportedly ceased share trading in Hong Kong for the second time this year.

China's property industries have suffered tremendously in the aftermath of Beijing's effort to rein in excessive property debt and wild customer speculation .

Evergrande, one of the Asian country’s leading developers, has been caught up in bankruptcy talks after amassing more than US$300 billion in debts.

Earlier on Monday, the business declared that trade would be halted, without explaining further.

In a notice sent to the Hong Kong Stock Exchange, the company stated that as a result, all structured products pertaining to the firm will be suspended from trading at the same time.

Both Evergrande Property Services Group and China Evergrande New Energy Vehicle Group have halted their shares.

The suspension comes as a US$2 billion debt payment becomes due on Wednesday and then another US$1.4 billion due next month.

Evergrande has been unable to pay creditors and suppliers, as well as finish projects and homes since the start of the pandemic-driven economic slowdown.

Over the weekend, the company's flagship subsidiary, Hengda Real Estate Group Co Ltd, received consent from its onshore bondholders to postpone a coupon payment that was due last September. The new date of payment would be September 2022.

On March 18 and 19, Hengda convened a meeting with bondholders of the ¥4 billion (US$629 million) 2025 bond to ratify the interest payment owed from September 2020 to September 2021, which would be paid in September 2023.

The company has attempted to sell assets, with chairman Hui Ka Yan personally paying off part of the debt through his own wealth.

Evergrande's problems have reverberated throughout China's real estate market, with some smaller companies racking up debt and others unable to raise funds.

In late January, the International Monetary Fund warned that the property funding issue could have ramifications for the global markets as well as the overall economy.

Before the halt, Evergrande's stock was trading at HK$1.65. After plummeting by 89% in 2021, the company’s stock has recovered 3.8% this year.

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Omkar Patwardhan started his professional career in the hospitality industry. Having nurtured a deep-sated passion for words however, he found his way into content writing and now pens down articles for numerous websites, including News Origins, spanning the sectors of business, finance, and technology.