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Chinese property developer Evergrande defaulted in 2021 and recently filed for bankruptcy protection in the United States. But it wasn’t until today that the company’s stock resumed trading after 17 months of absence from the Hong Kong stock exchange. The results were about what you’d expect.
Shares of the world’s most indebted property developer plunged as much as 87% on its open on Monday, trading for the first time since March 21, 2022.
Shares fell to as low as 22 Hong Kong cents on Monday, compared to its last close at 1.65 Hong Kong dollars per share on March 18, 2022.
The resumption of trade comes as the company posted a loss of 39.25 billion yuan ($5.38 billion) for the six months ended June, a smaller loss compared to the 86.17 billion yuan loss the same period a year ago.
The big question now is what will happen with Country Garden, another of China’s largest property developers. Country Garden signaled recently that it was at risk of defaulting on some bond payments. An effort to push off some of those payments for another three years was set to be voted on by bondholders last week but at the last minute, Country Garden canceled the meeting.
Distressed Chinese developer Country Garden Holdings postponed a meeting at the last minute with bondholders who were to vote an extension plan involving a 3.9 billion yuan (US$535 million) note due next week, adding to risks of a possible default.
Country Garden, which was previously China’s largest developer, on Friday night delayed the proposal to August 31, to extend the payment on the “16 Bi Yuan 05” note due on September 2, by three years, according to people familiar with the matter.
