The real estate company has been struggling with payment difficulties for weeks.
(Photo: Reuters)
Frankfurt Trading in shares of the hard-hit Chinese real estate giant Evergrande and its property management subsidiary on the Hong Kong stock exchange has been suspended. A major insider-relevant transaction is announced in the Evergrande stock exchange announcement.
According to various Chinese state media, the Chinese real estate company Hopson wants to take over a 51 percent majority in property management arm Evergrande Property Services. The price is said to be more than 40 billion Hong Kong dollars (the equivalent of 4.4 billion euros).
Evergrande Property Services and Hopson’s shares have also been suspended from trading. Their notices refer to the Hong Kong Stock Exchange Rules for Pending Acquisitions as the reason for the suspension.
It is the first time in the company’s more than $ 300 billion indebted company that its shares have been suspended from trading in its recent liquidity crisis. Previously, only bonds with different maturities were affected.
Top jobs of the day
Find the best jobs now and
be notified by email.
Against the background of financial difficulties, the shares of the Evergrande Group have already fallen by around 80 percent this year. According to media reports, the group missed a second important interest payment to bond owners last week.
The Evergrande crisis weighed on the mood in the Asian markets on Monday. In Hong Kong, the Hang Seng fell 2.3 percent. On the Tokyo stock exchange, the broad Nikkei index lost up to 1.4 percent to 28,375 points. In China, the stock exchanges are closed until Thursday due to celebrations in the country. There was also no trading in South Korea on Monday.
Evergrande urgently needs fresh money
Evergrande is considered the world’s most heavily indebted real estate company. The corporation has to raise money to pay banks, suppliers and bondholders on time. In addition, Evergrande owes retail investors, including many employees, billions of dollars. The company is so large that some experts fear a risk of contagion for the Chinese economy and beyond.
Just last week, Evergrande sold a stake in a bank for ten billion yuan (1.3 billion euros) to get some air. According to press reports, the leadership in Beijing is said to have asked local governments to prepare for the economic and social consequences of a possible bankruptcy of the group.
According to the Wall Street Journal, around 1.4 million buyers across the country are waiting for Evergrande apartments to be built or completed. The Chinese government is hesitant to come to the aid of the real estate giant. She actually wants to bring order to the highly speculative and booming real estate market in China and could want to set an example with Evergrande.
More: Three scenarios, how things will go with the real estate developer