Trading of shares of heavily indebted property developer China Evergrande suspended in Hong Kong

Trading of shares of heavily indebted property developer China Evergrande suspended in Hong Kong

Author of the article:

The Associated Press

Zen Soo

Published Sep 27, 2023  •  1 minute read

HONG KONG (AP) — Share trading of heavily indebted Chinese property developer China Evergrande Group was suspended in Hong Kong on Thursday, according to a notice on the Hong Kong stock exchange.

The suspension comes after Bloomberg News reported that the chairman of Evergrande, Hui Ka Yan, had been taken away earlier this month and placed under police watch according to people with knowledge of the matter.

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Shares of Evergrande closed at 32 Hong Kong cents on Wednesday. The company had resumed trading on Aug. 28 after a 17-month hiatus.

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Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.

Last week, Evergrande said in a filing that it had to delay a proposed debt restructuring meeting with creditors as “sales of the group have not been as expected by the company.”

The group is undergoing a restructuring plan, including offloading assets, to avoid defaulting on $340 billion in debt.

On Friday, China’s national financial regulator announced it had approved the takeover of the group’s life insurance arm by a new state-owned entity.

Earlier in September, police in Shenzhen, a southern Chinese city, said they had detained some staff at China Evergrande Group’s wealth management unit.

A series of debt defaults in China’s sprawling property sector since 2021 have left behind half-finished apartment buildings and disgruntled homebuyers. Observers fear the real estate crisis may further slow the world’s second-largest economy and spill over globally.

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