Embattled Chinese developer giant Evergrande announced Monday it was once again suspending trading of its shares in Hong Kong ahead of an announcement.
Evergrande, the world’s most indebted developer, is struggling to repay more than $300 billion in liabilities, including nearly $20 billion of international market bonds that were deemed to be in cross-default by ratings firms last month after it missed payments.
The property developer missed new coupon payments worth $255 million due last Tuesday, though both have a 30-day grace period.
The firm has set up a risk management committee with many members from state companies, and said it would actively engage with its creditors.
Short Notice at Hong Kong Exchange
“At the request of the Company, trading in the shares of the Company was halted at 9:00am on 3 January 2022 pending the release by the Company of an announcement containing inside information.”
Plan to Repay
Last week, Evergrande momentarily cheered investors by insisting it would be able to deliver tens of thousands of units this month, and pay off some debts.
But its shares took a dive at the end of the week after a report that the group had failed to meet two more offshore payments.
In recent months, the company has repeatedly said it will finish its unfinished projects and deliver them to buyers in a desperate bid to salvage its debts, despite having missed the earlier payment of more than $1.2 billion.
But in a new headache for the firm, local Chinese media reported over the weekend that it has been ordered to demolish 39 buildings by the authorities on Hainan island because the structures were built illegally on an artificial archipelago in the tourist hub.
How it impacts other firm
Evergrande’s woes have had knock-on effects throughout China’s property sector with some smaller firms also defaulting on loans and others struggling to find enough cash.
Bloomberg News calculates that China’s property firms need to stump up some $197 billion to cover maturing bonds, coupons, trust products and deferred wages to millions of migrant workers in January.
Its EV unit China Evergrande New Energy Vehicle Group plunged as much as 10% in early trading on Monday, while property management unit Evergrande Services declined 2.3%
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