Evergrande collapses on the stock market amid restructuring postponements and employee arrests
Shares of Hong Kong-listed Chinese real estate firm Evergrande fell 21% to a low of -25% after the company said it would delay a debt restructuring meeting scheduled for 9/25, creating new doubts about the possibility of finding solutions to its financial crisis.
Shares of other major Chinese real estate stocks in Hong Kong also fell, amid the sector's sell-off.
- The Hang Seng Mainland Properties Index fell just over 4% on Monday, while other real estate stocks suffered a setback.
- Country Garden fell 7.69%,
- Logan Group fell 7.95%,
- R&F Properties fell 6.62% on Monday.
Evergrande shares fell as low as 41 Hong Kong cents on Monday. To be clear, Evergrande shares plummeted as much as 87% after resuming trading on Aug. 28, turning it into a penny stock. Trading was suspended in March last year.
In a filing with the Hong Kong stock exchange on Friday, Evergrande said the Group's "sales were not as expected by the company" following the March debt restructuring announcement. Therefore Evergrande "deems it necessary to re-evaluate the terms of the proposed restructuring to satisfy the objective situation of the company and the creditors' requests".
The company also revealed on Sunday that due to an investigation into subsidiary Hengda Real Estate, it is unable to issue new bonds under its debt restructuring plan. Reuters reported that Evergrande's unit was under investigation by China's securities regulator for suspected information disclosure violations.
The latest development comes a week after police arrested some employees of Evergrande's wealth management unit. The position of employees of Evergrande or one of its subsidiaries is becoming as dangerous as that of a soldier in Ukraine…
In August, Evergrande had filed for Chapter 15 bankruptcy protection in a U.S. court, which allows a U.S. bankruptcy court to intervene in cross-border insolvency cases involving foreign companies being restructured by creditors.
Tianji Holdings, an affiliate of Evergrande, and its subsidiary, Scenery Journey, also filed for Chapter 15 protection in Manhattan bankruptcy court, the filing said.
So there is no peace for the most indebted real estate developer in the world…
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The article Evergrande collapses on the stock market amid restructuring postponements and employee arrests comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/evergrande-crolla-in-borsa-fra-rinvii-della-ristrutturazione-e-arresti-dei-dipendenti/ on Mon, 25 Sep 2023 19:27:40 +0000.