HONG KONG: Heavily indebted Chinese property giant Evergrande said Monday (Oct 2) it had applied to the Hong Kong Stock Exchange to resume trading its shares in the city the following morning.
Evergrande has become a symbol of China’s ballooning property-sector crisis that has seen several high-profile firms engulfed in a sea of debt, fuelling fears about the country’s wider economy and a possible spillover globally.
A statement on the Hong Kong bourse website said an “application has been made by the company to the Stock Exchange for the resumption of trading … with effect from 9am on 3 October 2023”.
The real estate behemoth announced last Thursday its chief was suspected of “illegal crimes” following the suspension of its shares from trading that day.
Thursday’s announcement by the company to the exchange came a day after media reports that boss Xu Jiayin was being held by police.
No specific reason was given for the decision to suspend share trading, which also affected the company’s property services and electric vehicle units.
Monday’s applications to resume trading applied to the Evergrande Group and its services arm, while there was no such request for the EV unit.
It is just weeks since the firm resumed trading following a 17-month halt caused by its failure to publish its financial results.
Evergrande estimated it had debts of US$328 billion at the end of June.
The company said last month it was unable to issue new debt because its subsidiary, Hengda Real Estate Group, was being investigated and key meetings planned for debt restructuring were shelved.
The firm said it was “necessary to reassess the terms” of the plan in order to suit the “objective situation and the demand of the creditors”.
Its property arm missed a key bond payment last week, and Chinese financial website Caixin reported that former executives had been detained.
The crisis has deepened a broader slowdown in the world’s second-largest economy.
The property sector has long been a pillar of growth – along with construction it accounts for about a quarter of GDP – and it experienced a dazzling boom in recent decades.
However, the massive debt accrued by its biggest players has been seen by Beijing in recent years as an unacceptable risk for China’s financial system and overall economic health.
Policymakers have come under intense pressure in recent months to unveil measures to support the economy, particularly the property sector.