Evergrande’s shares suspended, investors await statement

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Evergrande, the Chinese property giant’s shares, has been suspended. The investors are awaiting a statement about its future. The crisis at the company has triggered fears about its potential collapse. It could send shockwaves through the global markets.

The firm said that this trading halt came ahead of an announcement which is containing inside information about major transitions.

There are also reports about the fact that a rival real estate firm is all set to buy a majority of the stake from the unit of the company. In a regularity statement to the stock exchange of Hong Kong, the Evergrande Group said that its shares had been suspended from trading. It is also now pending the release of an announcement from the company which contains inside information about some major transactions.

Mean white, the rival property firm Hopson Development is all set to buy 51% of stake in Evergrande real estate for $5bn.

Hopson has not yet commented on the report. But it has further suspended trading in its shares. The problems of this company have skyrocketed in the market. There is a concern regarding its more than $300bn of debt.

The shares of the firm have fallen up to 80% since the starting of the year. The benchmark Hang Seng share index of Hong Kong ended its Monday trading session with a 2.2% low.

In recent weeks Evergrande has struggled enough to make payments to its inventors in its bonds and products. The cash-trapped group said that their wealth management products had made 10% of repayments. It also contrasts with the reports of overseas bondholders. These are saying that the company failed to make its payments by the date.

The company is taking steps to raise money. Last week it said that it was selling$1.5bn of stake that it won in a commercial bank. A state-owned asset management company bought almost 20% of the stake in Shengjing Bank.

The total liability of the company is equal to 2% of China’s gross domestic product. It is also triggering concerns that this problem can affect the world’s second-largest economy.

Credits: BBC

Ishita Paul