Evergrande shares plunge after debt settlement deal collapses
Date 21 Oct 2021 time 10:46
Investors fear Evergrande crash sends stocks tumbling after asset deal crash
Shares of Chinese real estate firm Evergrande Group, which is struggling with more than $300 billion in debt, fell 10.5 percent after it resumed trading on the Hong Kong Stock Exchange on October 21 following talks to sell a 50.1 percent stake worth 2,580. The USD million of Evergrande Property Services subsidiary and Hong Kong real estate company Hopson Development Holdings have failed.
The failed share deal has raised investor concerns that Evergrande will crash and send a serious blow to China’s economy.
Evergrande suspended trading on the Hong Kong Stock Exchange on Oct. 4 pending a major transaction, a share deal with Hopson Development Holdings.
Evergrande said it would continue to work to alleviate liquidity issues and warned that it would not guarantee the company would pay off its debts.
So far, Evergrande has defaulted on several dollar-denominated bonds. The 30-day grace period on $83.5 million in dollar bonds is due to expire on Saturday (Oct. 23), and if Evergrande fails to pay it will be defaulted.
The deal with Hopson Development Holdings is the second Evergrande deal to fail in days after previous negotiations for a $1.7 billion Hong Kong headquarters building with Chinese state-owned enterprises broke down. Because buyers are concerned about Evergrande’s financial situation.
Photo by Hector RETAMAL / AFP
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