Chinese real estate giant Evergrande has suspended its listing on the Hong Kong Stock Exchange at its own request, the company reported in a statement. This business conglomerate has dragged a crisis since last summer due to the doubts that exist that it can face a high debt, which could have a contagion effect on the financial system of other countries.
Will Evergrande go bankrupt? If that happens, what will happen?
"At the request of the company, the trading of the company's shares was stopped at 9:00 on January 3, 2022 pending the publication by the company of an announcement with privileged information," the company said without providing further information. details.
The suspension of the trading of Evergrande shares has coincided with the publication in the Chinese newspaper 'Cailian' that Evergrande has received from the local authorities of Danzhou the order to demolish in ten days a total of 39 buildings when determining that Evegrande obtained illegally permits for its construction.
The Chinese real estate conglomerate, which accumulates a liability of more than 300,000 million dollars (263,671 million euros), acknowledged in early December that there are no guarantees that it will have the necessary funds to meet its financial obligations.
In fact, the rating agencies S&P Global Ratings and Fitch declared the company a "selective default" and "restricted default", respectively, after it failed to make coupon payments on its senior dollar notes and after the expiration of the corresponding grace periods. Since last September, Evergrande has been reviewing its capital structure and liquidity position with the help of its financial and legal advisers, evaluating all available strategic options, and maintaining an ongoing dialogue with its creditors.
On December 31, in a year-end message to the group's employees, its president and founder, Xu Jiayin, announced that the resumption rate of the compound's real estate projects had reached 91.7%, while promising a "bright future" for the company. However, last month, the debt rating agency Fitch had declared Evergrande in suspension of payments for not paying the amounts it owed to its offshore bondholders.
The rating agency also mentioned then the "uncertainty" about the situation of the group, which had recently created a "risk control group" that included the presence of Xu Jiayin and that of state-owned companies from the southeastern province of Guangzhou. -where Evergrande is headquartered- and financial institutions.
Following the group's creation, the central bank and bank and stock market regulators sent reassuring messages assuring that the risk of contagion from the Evergrande crisis was "controllable." Also, on December 26, the real estate company had promised that the number of homes delivered to its buyers would reach 39,000 in December, more than in the previous three months.
At the end of 2021, some commentators pointed out that the Communist Party of China had moderated its language regarding the real estate sector, which was interpreted as a possible relaxation of the restrictions that Beijing imposed on access to bank financing for the most indebted developers. In 2021, his shares lost 89% of their value.