Evergrande shares suspended in Hong Kong amid acquisition rumours

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Trading in shares of China’s beleaguered real estate giant Evergrande was suspended on the Hong Kong Stock Exchange (HKEX) on Monday after the world’s most indebted developer missed back-to-back interest payment deadlines and failed to pay back investors. efforts continued.

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“Trading in China Evergrande Group shares will be halted at 9 a.m. today,” a regulatory filing with HKEX said without assigning any reason. “Accordingly, all structured products belonging to the company will also be debarred from trading at the same time.”

HKEX did not specify the reasons behind the stoppage or the introduction of the suspension. However, this has intensified speculation over a possible acquisition in the company’s asset management arm, as the cash-strapped company seeks to raise funds to meet its dues.

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Calian, a Chinese online news service affiliated with the state-run newspaper Securities Times, said that another developer, Hopson Development Holdings, was planning to acquire a majority stake in Evergrande Property Services Group.

Trading in Hopson’s shares was also suspended in Hong Kong on Monday, “until the issuance of the announcement(s) in respect of a major transaction of the Company, whereby the Company has agreed to acquire the shares of a Company .. . Stock listed on the exchange,” it said in a filing.

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It is not yet clear whether Hopson’s acquisition announcement pertains to Evergrande. However, Reuters The news agency has reported that the Chinese government – which has so far enlisted one of the country’s most important developers to help with the bailout – is hoping the purchase of the property could be a way for the company.

As China’s second-largest developer, Evergrande is often called “too big” for the country’s downfall. However, with $300bn (£221bn) of debt, the company is embroiled in a major crisis, missing interest payment dates and its stock price has fallen by more than 80 percent in the past year.

The highly indebted asset giant missed another interest payment for an offshore bond last week, the second default in the same month. It was due to pay $47.5m (£35m) to foreign bond holders as of Wednesday.

However, the company provided some relief to stock market investors, who feared the domino effect of Evergrande’s collapse on Chinese and global markets, when it previously paid off a domestic bond and last week invested $1.5 in a regional Chinese bank. bn stake was sold.

“It looks like the asset management unit is the easiest one to settle in the grand scheme of things, indicating the company is trying to generate near-term cash,” OCBC analyst Ezine Hu told Reuters.

“I’m not sure if this means the company has ceased to survive, especially selling an asset that means they are still trying to raise cash to pay the bills.”

According to Reuters, pressure from the authorities has worked and a handful of state-owned enterprises have already conducted due diligence on Evergrande’s property in the southern Chinese city of Guangzhou.

Potential buyers of Evergrande’s core property in Guangzhou have been “settlemented” with “both political and business considerations” in mind, Reuters quoted a source as saying, adding that the authorities were not just looking at a few companies bidding for similar properties. want to see.

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Credit: www.independent.co.uk /

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