Monday, October 4th, 2021
No trading on the stock exchange
Evergrande papers exposed in Hong Kong
The Chinese real estate company Evergrande is shaking threateningly. The mountain of debt is gigantic, due dates can no longer be fully serviced. Observers expect the Chinese government to break it up. In Hong Kong, the paper will not be traded at the beginning of the week.
The heavily indebted Chinese real estate company Evergrande suspended trading in its shares on the Hong Kong Stock Exchange at the beginning of the week without giving any reason. “Trading in the shares of the China Evergrande Group will be discontinued,” said a statement from the company to the stock exchange. Evergrande has accumulated a mountain of debt of around 260 billion euros through an aggressive expansion financed on credit over the past few years.
The group’s share price has fallen by around 80 percent since the beginning of the year. Just last week, the company said it would sell a $ 1.5 billion stake in a regional Chinese bank to raise much-needed capital. The company is currently neither in a position to fully service its due dates, nor to hand over finished apartments to the buyers.
Beijing has so far not commented on the real estate developer’s difficulties. Experts speculate that the government could order a breakup. Bankruptcy could have dramatic consequences for the Chinese banking and real estate sectors, as well as affecting the Chinese and ultimately the global economy.