Shares in heavily indebted China Evergrande Group (恒大集團) were taken off the Hong Kong Stock Exchange yesterday, capping a grim reversal of fortune for the once-booming property developer.
A committee at the bourse had decided earlier this month to cancel Evergrande’s listing after it failed to meet a deadline last month to resume trading — suspended since early last year.
The delisting is the latest milestone for a firm whose painful downward spiral has become symbolic of China’s long-standing property sector woes.
Photo: AFP
Once the country’s biggest real estate firm, Evergrande was worth more than US$50 billion at its peak and helped propel China’s rapid economic growth over the past few decades.
However, it defaulted in 2021 after years of struggling to repay creditors.
A Hong Kong court issued a winding-up order for Evergrande in January last year, ruling that the company had failed to come up with a suitable debt repayment plan.
Liquidators have made moves to recover creditors’ investments, including filing a lawsuit against PricewaterhouseCoopers LLP and its Chinese arm for their role in auditing the debt-ridden developer.
The firm’s debt load is bigger than the previously estimated amount of US$27.5 billion, a filing earlier this month attributed to liquidators Edward Middleton and Tiffany Wong (黃詠詩) showed.
The statement added that Evergrande was a holding company and that liquidators had assumed control of more than 100 companies within the group.
Evergrande’s saga — and similar issues faced by other property giants including Country Garden Holdings Co (碧桂園) and China Vanke Co (萬科) — have been closely followed by observers assessing the health of the world’s second-largest economy.
After a decades-long construction boom fueled by rapid urbanization, China’s property sector began to show worrying signs in 2020, when Beijing announced new rules to limit excessive borrowing.
With Evergrande’s default the following year and other complications across the industry continuing, a return to the boom years has proven elusive for policymakers, even after stimulus measures were unveiled in September last year.
China’s financial hub of Shanghai yesterday eased home-buying rules in the latest attempt by authorities to contain the nation’s prolonged property crisis.
Eligible residents, including those from outside Shanghai, can now buy an unlimited number of homes in the outer suburbs, authorities said in a statement.
Non-residents who have paid pensions for three years can now purchase new homes in urban areas, instead of only being allowed to buy existing residences there.
Shanghai’s move follows similar easing by the capital city Beijing earlier this month, which also allowed eligible residents to buy an unlimited number of homes outside the fifth ring roads, widely considered suburban areas.
Additional reporting by Bloomberg
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