Evergrande halts share trading in Hong Kong

HONG KONG: Embattled property giant China Evergrande Group suspended trading in its shares in Hong Kong yesterday pending an announcement on a “major transaction”, as the firm struggles in a sea of debt and faces a default.

The halt came as reports said Hong Kong real estate firm Hopson Development Holdings Ltd planned to buy a 51% stake in Evergrande’s property services arm as the troubled giant tries to offload assets to meet its obligations.

“At the request of the company, trading in the shares of the company was halted at 9 a.m. on October 4, 2021 pending the release by the company of an announcement containing inside information about a major transaction,” Evergrande said in a statement to the Hong Kong Stock Exchange.

Trading in Hopson was also suspended “pending the release of announcement(s) in relation to a major transaction”, according to a company statement to the exchange.

Bloomberg Intelligence analyst Patrick Wong said the suspension might be related to a major asset disposal or capital restructuring.

Evergrande Property Services Group was also suspended but the firm’s electric vehicle company, which last week scrapped a proposed Shanghai listing, continued to trade and rose nearly 30%.

China Evergrande officials have been struggling to deal with a crisis that has left the group more than $300 billion in debt, fuelling fears of a contagion for the wider Chinese economy that some warn could spread globally.

Last week it said it would sell a $1.5 billion stake in a regional Chinese bank to raise much-needed capital, as it struggles to make interest payments to bondholders.

Beijing has stayed silent on the travails of the property empire, but state media has trailed various responses in a nod to the mood towards a private company that grew on a debt binge in the boom years of Chinese real estate.

And last Wednesday the People’s Bank of China said the country’s financial sector must meet the goals of “stabilising land and housing prices” and “insist on not using real estate as a shortterm economic stimulus.’’

Evergrande officials have hired experts including financial services firm Houlihan Lokey Inc — which advised on the restructuring of Lehman Brothers when it went under — as they try to avoid a collapse.

State regulators have also sent a team of financial advisers to assess the company, according to reports.

“There still remains very little visibility from the Chinese government over Evergrande’s fate, although a slow and steady dismantling of the company appears to be the favoured course right now,” said OANDA’s senior analyst Jeffrey Halley.