HONG KONG (Reuters) – China Evergrande Group stock, which was suspended from trading on Monday, gained up to 10% in trading on Tuesday before slashing gains after the struggling property developer confirmed receiving the order to destroy 39 buildings in Hainan while ensuring that this would not affect its projects in the tourist island.
The Chinese group, which is crumbling under a global debt estimated at more than 300 billion dollars (266 billion euros), said that its sales concluded for 2021 had fallen by 39% over one year to 443 billion yuan.
On the Hong Kong Stock Exchange, Evergrande shares rose 1.89% around 07:25 GMT after gaining up to 10.06% while the Chinese real estate sector index rose 3.26%.
The quotation of the title was suspended Monday pending the publication of “inside information”.
Evergrande confirmed Monday evening that authorities in Danzhou city, Hainan province, ordered him on December 30 to demolish 39 buildings on Ocean Flower Island, a vast tourist complex of 60,000 homes in which the group has invested 81 billion yuan.
Evergrande did not disclose the reason for the demolition order and Reuters could not reach authorities in Hainan for comment.
The order does not apply to other batches of the project, Evergrande said on Tuesday, saying he wanted to solve the problem “in an appropriate manner”.
Regarding the state of its balance sheet, the group has indicated that it is continuing to actively discuss with its creditors.
(Report Clare Jim; Blandine Hénault for the French version, edited by Marc Angrand)
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