China Evergrande Debt Shares Slump 14% To Four-Year Low

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The logo of the Chinese real estate company Evergrande Group or Evergrande Real Estate Group can be seen on smartphones and PC screens.

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BEIJING – Hong Kong Listed Company Shares Chinese group Evergrande fell to a four-year low on Tuesday following news of an asset freeze that brought renewed attention to the real estate conglomerate’s debt problems.

Evergrande shares are down more than 14% as of Tuesday afternoon after falling 16.2% the day before.

According to Wind Information, the drop since Friday resulted in the loss of about HK $ 37 billion ($ 4 billion) from China Evergrande shares, bringing the stock to around HK $ 93 billion (nearly $ 12 billion).

Shares in China Evergrande have plunged more than 60% in the past 12 months as the Chinese authorities tried to cool the country’s hot real estate market with new restrictions, in particular, real estate lending.

The latest drop in shares follows news that a local court in Jiangsu province ruled in early July that China Guangfa Bank branch could freeze 132.01 million yuan ($ 20.6 million) in deposits from Evergrande Real Estate and its subsidiary Yixing Hengyu. Real Estate.

The decision was made public last Tuesday, but it was not grab the attention of the market until Sunday evening, according to Reuters.

Evergrande said in a statement on Monday that Hengyu had a 132 million yuan loan from the bank in question, due on March 27 next year. According to CNBC’s translation of the Chinese text, the company said it would sue the bank.

“It doesn’t bother me that much,” Henry Chin, global head of investment thinking and head of research in the Asia-Pacific region of CBRE, told CNBC. Martin Sung on the “Squawk Box Asia… “

Chin pointed to news over the past few days that indicated to him that the Chinese government may increase its oversight of commercial debt problems.

Citing sources, Reuters reported on Friday that Chinese regulators want monthly disclosures from developers about a form of debt called bills of exchange. The report says Evergrande is the largest issuer with 205.7 billion yuan ($ 32 billion) of commercial securities placed with its main real estate group last year, up 390% from 2015.

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Chin said requiring regular disclosure of commercial bond debt will reduce the likelihood of unexpected shocks from developers. He expects Evergrande to follow the lead of other developers in selling non-core assets to pay off debt and improve their financial health.

Evergrande was founded in the late 1990s as a real estate developer.

Over the past few years, the company has entered the Fortune Global 500 and has expanded into industries such as film and entertainment, life insurance, and spring water. Evergrande supports Guangzhou football team.

The conglomerate’s new-energy vehicle division, which includes electric vehicles, has announced ambitious plans to produce 1 million vehicles by 2025 and 5 million by 2035.



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