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China: Evergrande shares rise as Hong Kong trading resumes

Posted by on 2022/01/04. Filed under Breaking News,China. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

This article is originally published on BBC.com

People stand in front of the Evergrande Centre from which logo has been removed.

The company’s logo has been removed from the Evergrande Centre in Shanghai
Image Copyright: Reuters

Shares in crisis-hit Chinese property developer Evergrande rose on Tuesday after they resumed trading in Hong Kong.

The heavily-indebted firm had suspended its shares on Monday pending the release of “inside information”.

Evergrande’s shares jumped as much as 10% before trimming gains to close 1.3% higher.

The company said its sales for 2021 plunged 39% from the year before to $69.5bn (£51.6bn).

Evergrande also confirmed it had been ordered to demolish 39 buildings on the island of Hainan.

The firm said the buildings affected by the demolition order are at its Ocean Flower Island project, and added the decision does not involve other plots of land in the project.

“The company will actively communicate with the authority in accordance with the guidance of the decision letter and resolve the issue properly,” Evergrande said in a filing to the Hong Kong Stock Exchange.

The announcement also addressed concerns about the firm’s financial position: “With regard to the company’s current liquidity situation, the company will continue to actively maintain communication with creditors, strive to resolve risks and safeguard the legitimate rights and interests of all parties.”

Evergrande has more than $300bn of debt and is scrambling to raise cash by selling assets and shares to repay suppliers and creditors.

Last week, the company did not make some interest payments on its offshore bonds.

Its $19bn in international bonds were deemed to be in default by rating agencies after it missed a payment deadline last month.

The company has also dialled back plans to repay investors in its wealth management products.

Evergande’s shares have lost almost 90% of their value in the last year as investors fret that it may be close to collapsing under the weight of its debts.

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