Home Breaking News BREAKING: Evergrande shares suspended in Hong Kong amid takeover rumours

BREAKING: Evergrande shares suspended in Hong Kong amid takeover rumours

6

Turmoil in Hong Kong this morning, as trading in shares from property giant Evergrande Group and its real estate management unit Evergrande Property Services have been suspended.

The companies’ filings did not specify why the shares were stopped from trading.

Cailian, a Chinese online news service affiliated with the state-run newspaper Securities Times, said another developer, Hopson Development Holdings, was planning to acquire a majority share in Evergrande Property Services Group.

Trading in Hopson’s shares also was suspended on Monday in Hong Kong, “pending the release of announcement(s) in relation to a major transaction of the company under which the company agreed to acquire the shares of a company … listed on the stock exchange,” it said in a filing.

Debt of billions

Evergrande has been struggling to avoid defaulting on billions of dollars of debt. The company owes money to banks, customers and contractors and is facing a cash crunch.

Its situation worsened after the government tightened limits on corporate debt levels.

The company ran up billions of dollars in debt building apartment complexes, shopping centres and office towers over the years.

In August 2020, the government ordered tightened controls on financing for China’s 12 biggest developers, forcing them to reduce corporate debt loads that are seen as a threat to the economy.

Evergrande has been selling off various assets to try to alleviate the problem, and Evergrande Group’s shares have lost more than 80% of their value this year.

Like Evergrande, Hopson, based in Guangdong adjacent to Hong Kong, is one of China’s biggest property companies.

Jitters over a slowdown in China’s economy and potential turmoil in its vital property industry have rattled world markets in the past few weeks.

Hong Kong’s benchmark Hang Seng index dropped 2.2% on Monday on heavy selling of real estate companies and banks.

https://www.cityam.com/breaking-evergrande-shares-suspended-in-hong-kong-amid-takeover-rumours/