Evergrande shares fall 20% to new high as default fears resurface – .

Evergrande shares fall 20% to new high as default fears resurface – .

Evergrande stock closed 20% lower at Hong Kong dollar 1.81 ($ 0.23), the lowest since its Hong Kong listing in 2009. It has lost 87% of its value since the start of the year.

The company, which has total liabilities of around $ 300 billion, warned Friday night that it may not have enough funds to meet its financial obligations. It faces an immediate test of its ability to repay its creditors Monday with the expiration of a 30-day grace period on interest payments on its dollar-denominated bonds.

“In light of the current state of liquidity (…) there is no guarantee that the group will have sufficient funds to continue to meet its financial obligations,” said Evergrande Friday evening in a stock market file. The company “plans to actively engage” with offshore creditors on a restructuring plan, he added.

The Guangdong provincial government, where Evergrande is based, said it had summoned Evergrande chairman Xu Jiayin to a meeting on Friday evening. In a statement, the government said it would send a task force to Evergrande to oversee risk management, strengthen internal controls and maintain normal operations, at the company’s request.

Meanwhile, in a series of seemingly coordinated statements, three Chinese regulators – the People’s Bank of China, the banking and insurance regulator, and the securities regulator – have said any risk of Evergrande overflowing in the real estate market. , home owners and the financial system can be controlled.
Regulators also reiterated previous accusations that the company got into trouble because of a combination of mismanagement and indiscriminate expansion.

Evergrande has worked hard to raise funds to repay lenders, and Xu even sold personal property to support his finances. So far, the company appears to have avoided defaulting on any of its publicly traded offshore bonds by paying late interest before the expiration of the grace periods for each of those bonds.

Nonetheless, Friday’s warning is a sign that the company may not be able to make further payments on time on its debt.

In the case, Evergrande also said it received a demand from creditors to fulfill its promise to secure a payment of $ 260 million. Creditors can demand an expedited repayment if the company is unable to honor its debts, he added.

The collapse in Evergrande stocks and other real estate stocks weighed on Hong Kong’s benchmark Hang Seng on Monday. This fell 1.8%, also penalized by large losses in Chinese tech stocks that collapsed in New York on Friday after Didi’s brutal decision to leave Wall Street just five months after its IPO.

The Hang Seng Tech Index, which tracks the city’s 30 largest listed tech companies, fell 3.3% to its lowest level on record.

Alibaba (BABA) lost 5.6%. Baidu (START) fell 5.7%, and JD.com (JD) lose 4.9%.

The other Asian indices were mixed. from Japan Nikkei 225 (N225) finished down 0.4%, and China Composite de Shanghai (SHCOMP) was down 0.5%.

Dow and S&P 500 futures rose on Monday after Friday’s losses. Dow futures contracts rose 178 points, or 0.5%. Futures on the S&P 500 were also up 0.6%. But futures on the Nasdaq slipped 1.2%, continuing the downward spiral after the index fell 1.9% on Friday.

The technology sale spread to cryptocurrencies over the weekend. Bitcoin plunged more than 20% on Saturday, before recovering some losses on Sunday. On Monday, the digital token was trading around $ 48,159, according to CoinDesk.


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