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Fall In Evergrande’s Shares After Coming Back From Halt

News In Brief Business and Economy

Fall In Evergrande’s Shares After Coming Back From Halt

fall-in-evergrande-s-shares-after-coming-back-from-halt

News Synopsis

The heavily indebted Chinese real estate behemoth had halted trade ahead of an announcement. According to reports, real estate giant Hopson Development is planning to purchase a 51 percent share in its property services division. Evergrande announced on Wednesday that the $2.6 billion (£1.88 billion) deal had fallen through due to a lack of agreement on the parameters. On Thursday, equities in Hong Kong plummeted as much as 14% after resuming trading after a 17-day hiatus.

Evergrande owes money to another Chinese property developer, Hopson Development, and several analysts speculated that this proposed acquisition was a method for Evergrande to pay off its obligation.

The Evergrande issue began last year, when Beijing, concerned about the real estate sector's growing debt, enacted new restrictions to limit the amount owed by large developers. Its stock price has plummeted, and major credit rating agencies have downgraded its debts. The troubled property behemoth is said to have twice skipped interest payments to foreign investors in recent weeks.
 

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