What to know about the delisting of property developer China Evergrande’s shares in Hong Kong

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What to know about the delisting of property developer China.jpeg

Bangkok (AP) – Evergrande stocks from the Hong Kong Securities Stock Exchange were removed on Monday, which represents another step in the decline in the giant real estate developer, which has contributed to a long crisis in the real estate market in China.

Evergrande creditors still end the debts of more than $ 340 billion. Once the second largest developer in China, she faced a problem when Chinese organizers settled several years ago, as they considered excessive borrowing by developers.

In dozens of real estate companies, this caused the failure to pay their debts, which led to the spread of the real estate market, which is still on the second largest economy in the world.

Here is what to know about Evergrande:

A single -time pioneer in the real estate market in China

The Hong Kong Stock Exchange said on Monday that Evrandi’s shares had been removed from Monday morning, as expected. The shares were last traded on January 29, 2024, then it was suspended after a Hong Kong court ordered the liquidation of the company when it failed to submit a plan to restructure the viable debt.

The stock market rules state that the company’s shares list may be canceled if trading in securities is suspended for 18 consecutive months.

The role of Evergrande in the property crisis in China

After years of warnings that led to the reduction in the world rankings about the credit classification of the Chinese government in 2017, the ruling Communist Party cracked real estate debts in 2020. It imposed controls known as “three red lines” that prohibit the developers strongly such as Evergrande to borrow more to pay links and banking panels as they were.

Fears of the potential negligence of Evergrande in 2021 shook global markets, but they eased after the Chinese Central Bank said that his problems had been contained and that Beijing would keep credit markets operating. Evergrande was one of the largest developers who failed to pay their creditors.

Chinese home buyers often pay apartments before they are built. The credit crisis of Evergrande and other developers led them to suspend construction, leaving many projects in forgetting. The slowdown and building of home purchases throughout the economy extend, hitting demand for building materials, devices and even vehicles at a time when China was also competing with the disturbances caused by the Covid-19s.

Since most Chinese families are associated with wealth in property, the anemia housing market was a major factor in consuming spending.

Grind the retreat from the property

There was some recovery in the housing sector, but the prices of homes and investment continued to decline.

Before the campaign to borrow, real estate constituted about 20 % of the Chinese economy. Upon spending on steel and copper for construction, furniture and other relevant purchases were added, as its share of the economy from the economy increased to about a third.

Chinese leaders have sought to obtain developers to finish projects and provide already paid apartments, providing billions of lending and benefits. They encouraged local governments to buy excess apartments to serve as affordable housing, and relax the requirements for payment and mortgage.

They also raised many restrictions on buying homes for investment purposes in major cities, a move by HSBC Global Investment Research as “surprising” as it came early on what was expected.

They said in a recent report that sales and home prices are declining in August.

She said: “We believe that it is a positive change that shows the government’s augmented creativity in offering measures, which will help enhance market confidence and address anxiety about stimulation after it is too late.”

Evergrande mode

Evergrande, its headquarters in southern China, was founded near Hong Kong, by businessman Hui Ka Yan, also known as Xu Jiayin, in 1996. It reflected its rise and retreating a nation in the markets in the Chinese market after the reforms designed by apartments specific by employees to the homeland.

The shares of the company were listed in Hong Kong in 2009.

Evergrande applied to protect from bankruptcy 15th in New York City in 2023, but this case was later withdrawn. Although the Hong Kong court ordered the end of the company’s debts, more than 90 percent of its assets are on the Chinese main mainland, which makes it difficult to enforce the payment of its creditors.

Her descriptions said in a recently written report that they received debt claims totaling $ 45 billion as of July 31, which is much higher than about 27.5 billion dollars in the obligations that were revealed in December 2022, and that the new number was not final. They also took over more than 100 companies in the group of collective assets worth $ 3.5 billion as of January 29, 2024.

The lisers said so far, about $ 255 million of assets has been sold, describing the “modest” perception.

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AP Kanis Leung correspondent in Hong Kong contributed.

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2025-08-25 11:19:00

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