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Evergrande: Company Signals For A Major Update Soon To Come

Evergrande’s stock has been halted as investors await an announcement on the company’s future.

The crisis at the world’s most indebted property developer has sparked worries that it might collapse, sending shockwaves across global markets.

The trade stop was announced before of “an announcement containing inside knowledge about a big transaction,” according to the business.

It comes as a rival real estate business is rumored to be in talks to purchase a majority share in an Evergrande property.

Evergrande Group’s shares have been stopped from trading “waiting the release by the Company of an announcement containing inside knowledge regarding a substantial transaction,” according to a regulatory notification to the Hong Kong Stock Exchange.

According to Chinese news site Cailian Press, rival Hong Kong-listed property business Hopson Development is planning to purchase a 51 percent interest in Evergrande Real Estate for about $5 billion.

Hopson has yet to respond to the claim, although trading in its shares has been halted until an announcement “in respect to a substantial transaction.”

Markets have been shaken by Evergrande’s troubles, which stem from fears over the company’s more than $300 billion (£222 billion) in debt.

Since the beginning of the year, the company’s stock has dropped over 80%.

In early Monday trading, Hong Kong’s benchmark stock index was down 2.25 percent.

What Is The Current Situation?

Evergrande has had difficulty making payments to investors in its bonds and wealth management products in recent weeks.

The cash-strapped company said last Thursday that its wealth management unit had made a 10% payback on its products, which are mostly held by Chinese retail investors.

In contrast, allegations from foreign bondholders claim that the firm has failed to make interest payments on time.

Last week, the heavily indebted real estate behemoth reportedly skipped interest payments to international investors for the second time in as many days. By Wednesday, it was supposed to pay $47.5 million to international bondholders.

Bondholders, however, informed Reuters and Bloomberg that they had yet to receive payment.

The firm has a 30-day grace period under its investment agreements before the missing payments become a default.

Evergrande has $160 million in interest debt payments coming in the next month.

In recent weeks, the firm has taken measures to collect money due to consumers, investors, and suppliers. It said last week that it was selling a $1.5 billion interest in a commercial bank.

A state-owned asset management business purchased an almost 20% interest in Shengjing Bank.

According to the deal, the profits of the sale will be used to repay Evergrande’s debts to Shengjing Bank, one of the company’s key lenders.

The company’s entire liabilities represent around 2% of China’s GDP.

This has raised fears that the country’s troubles may extend to the world’s second largest economy, causing shockwaves across the global financial system.

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