Business & Economy

China’s Evergrande halts trading in Hong Kong amid growing real estate crisis

Beijing, Jan 3 (EFE).- Heavily indebted Chinese property developer Evergrande has suspended trading in Hong Kong on Monday amid a growing real estate crisis, Chinese news portal Sina reported.

In a statement to the Hong Kong stock exchange, the embattled developer did not offer a reason for the sudden halt in trading.

Late Sunday, Chinese media reported that the local government of Danzhou, on the southern island of Hainan, ordered Evergrande to demolish 39 buildings within 10 days because the project violated “urban planning laws and rural regulations.” The real estate group is yet to comment on the matter.

On December 31, in a year-end message to the group’s employees, Evergande’s president and founder, Xu Jiayin, announced that the resumption rate of the conglomerate’s real estate projects had reached 91.7% and pledged a “bright future” for the company.

“As long as we resume work and production at all costs, and do a good job in project construction, we will surely be able to deliver the houses to the owners, and we will surely be able to resume sales, resume operations, and pay off debts,” Xu said in a statement.

However, in early December, debt rating agency Fitch declared Evergrande to be in restricted default over unpaid coupons. The retail group last year declared over $300 billion in liabilities.

The rating agency reported the homebuilder had formed a Risk Management Committee that comprised the company’s senior management, representatives of Guangzhou state-owned companies and representatives from national financial institutions “to mitigate and eliminate the group’s future risks.”

Following the committee’s creation, central bank and stock market regulators published reassuring statements assuring that the risk of contagion from the Evergrande crisis was “controllable.”

On December 26, the real estate company promised that the number of homes delivered to its buyers would reach 39,000 in December, more than in the previous three months.

By the end of 2021, some experts pointed out that the Communist Party of China had moderated its language regarding the real estate sector, which was interpreted as a possible relaxation of restrictions that Beijing had imposed on access to bank financing for the nation’s most indebted developers.EFE


Related Articles

Back to top button