Shanghai, China, Jan 29 (EFE).- Indebted Chinese real estate giant Evergrande and its two subsidiaries listed on the Hong Kong Stock Exchange stopped trading in their shares minutes after Hong Kong ordered the liquidation of the group, which caused a sharp drop in its securities value.
At about 10:30 a.m. local time (02:30 GMT), Evergrande shares were down 20.87 percent; those of its electric vehicle subsidiary, Evergrande NEV, 18.21 percent, and those of the subsidiary dedicated to real estate management, Evergrande Property Services, 2.5 percent.
Evergrande shares were as of press time trading per unit at HKD0.16 ($0.02), a drop of practically 99.5 percent compared to the peak registered in October 2017 of HKD31.55.
Before the court hearing, these shares had already experienced strong double-digit falls due to information that said the last round of negotiations between Evergrande and its foreign creditors had ended in a breakdown, so they were going to join the liquidation petition against the promoter.
“The hearing has lasted a year and a half and the company has still not been able to present a concrete restructuring proposal. I think it is time for the court to say that enough is enough,” the judge in the case said Monday when ruling in favor of creditors. .
A provisional judicial administrator for Evergrande is expected to be named Monday, although analysts doubt whether he will be recognized in mainland China, where the group has most of its assets.
Evergrande, with a liability of about $330 billion, went into default more than two years ago after suffering a liquidity crisis due to the restrictions imposed by Beijing on the financing of developers with a high level of leverage, after which it was intervened on by Chinese authorities.
The group has been plunged into a new crisis after its founder and President Xu Jiayin was placed under a type of house arrest over “suspicions of illegal activities.” EFE