China Evergrande shares briefly pop in reopen after developer says…

Evergrande slides into default while some ratings agencies keep quiet

An exterior view of China Evergrande Centre in Hong Kong, China March 26, 2018.

Bobby Yip | Reuters

BEIJING — Indebted property developer China Evergrande’s contracted gross sales plunged final 12 months as the true property big struggled to repay collectors.

A submitting Tuesday confirmed the corporate’s contracted gross sales of properties totaled 443.02 billion yuan ($69.22 billion) final 12 months, down 38.7% from the 723.25 billion yuan in contracted gross sales reported for 2020.

Evergrande shares reopened larger in Hong Kong on Tuesday afternoon, with shares attempting to carry beneficial properties of about 3% earlier than turning decrease.

Buying and selling was halted as of 9 a.m. Monday, with shares at 1.59 Hong Kong {dollars} (20 cents) every. That is simply above the all-time intraday low of 1.42 Hong Kong {dollars} per share set on Dec. 24, in keeping with FactSet.

The corporate added it “will proceed to actively keep communication with collectors, attempt to resolve dangers and safeguard the professional rights and pursuits of all events.”

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Evergrande shares have plunged greater than 88% during the last 250 buying and selling days. The corporate missed funds to collectors in December, Fitch Scores stated, sending the developer into default.

Evergrande is the most important Chinese language actual property developer by issuance of offshore, U.S. dollar-denominated debt, which stood at $19 billion final 12 months. The developer had a complete of $300 billion in liabilities as of final 12 months.

The corporate was China’s second largest developer by gross sales in 2020.

Like different Chinese language actual property builders, Evergrande’s enterprise mannequin depends closely on gross sales of residences to clients earlier than the models are accomplished. S&P World Scores stated in November that an Evergrande default “is extremely probably” because the firm is not capable of promote new properties.

Evergrande added {that a} demolition order for its Ocean Flower Island challenge solely utilized to 39 buildings, in keeping with Tuesday’s submitting with the Hong Kong inventory change.

That is breaking information. Please test again for updates.

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