Evergrande stock plunges 10.5% after returning to trading on the Hong Kong Stock Exchange


The shares of the giant Chinese real estate company “Evergrand”, which is under more than 260 billion euros of debt, fell 10.5% Thursday, after it returned to trading on the Hong Kong Stock Exchange.
The possible bankruptcy of Evergrande, one of China’s largest property developers, threatens to have a “domino effect” on the world’s second-largest economy.
The company suspended trading in its shares on October 4, after it defaulted on several loans.
And on Wednesday evening, Evergrande announced that trading in its shares would resume Thursday morning, warning at the same time that it “may not be able to meet its financial obligations.”
Despite the storm that Evergrande raised in the financial markets in September, Beijing has not yet announced whether or not it will intervene to save the company that is threatened with bankruptcy.
What increased the risk of Evergrande’s bankruptcy was its failure to sell 50.1% of the capital of one of its companies to the Chinese “Hobson” group for real estate development, in a deal that would have secured it 2.2 billion euros.
And “Evergrand” confirmed Wednesday that it “will continue to implement measures aimed at alleviating the liquidity problems it is experiencing.”
And “Evergrand”, which has diversified a lot of its activities in recent years, has been struggling for several weeks to pay its dues and deliver apartments.
At the end of September, the group had not been able to repay loans totaling $131 million (€113 million). This month, it was unable to repay a third loan of $148 million (€127 million).
But the group is not yet in default because it benefits from a 30-day grace period for each loan.
The grace period for the first loan expires on October 23, i.e. Saturday.


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