Evergrande: defaulted developer gets delisting reminder as restructuring, probe on US$2 billion deposits leave investors in the dark
- Hong Kong’s stock exchange issued resumption guidance, spelling requirements to end stock halt
- Troubled developer pledges to unveil its debt reorganisation plan by next month, while a probe into lost US$2 billion deposits remains open-ended
The Hong Kong stock exchange on Tuesday issued a “resumption guidance” for the Shenzhen-based home builder to comply with its listing rules, according to a filing, as the stock remained suspended from trading since March 21.
Under its rules, the bourse operator may cancel the listing of any securities that have been suspended for 18 straight months. While China Evergrande’s limit will only expire on September 20 next year, the exchange said it has the right to impose a “shorter specific remedial period, where appropriate”.
“It brings out the message” about the delisting risk, said Sam Chi-yung, chief strategist at Patrons Securities in Hong Kong. “It is not easy to fulfil the requirements for resumption” given the complicated financial situation at the group, he added.
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Evergrande failed to pay the interests on US$645 million and US$590 million of junk bonds in December, even after a grace period, triggering cross-default on its other borrowings. The firm has not published its accounts after the June 2021 interim report when it disclosed 1.97 trillion (US$294 billion) of total liabilities.