Evergrande suffers US$2.2 billion market beating as stock plunges 79%, testing creditors in debt workout plan
- Evergrande’s shares earlier fell as much as 87 per cent to 22 Hong Kong cents as soon as trading commenced, erasing US$2.4 billion from its market capitalisation
- Meetings for creditors to vote on its rescue plan to reorganise some US$20 billion of offshore debt were postponed by about a month on Monday
Evergrande’s shares tumbled 79 per cent to 35 HK cents, versus the pre-suspension price of HK$1.65 on March 21 last year. The slump erased HK$17.2 billion (US$2.2 billion) from its capitalisation. The stock earlier sank by as much as 87 per cent to 22 HK cents.
In its application to lift its trading suspension, Evergrande said it had fulfilled all seven conditions to rescind an order suspending trading in its shares.
“The company has sufficient business operations,” it said in a filing to the Hong Kong stock exchange. “The company places priority on stabilising operations and resolving risks, and pushes forward with utmost efforts in ensuring the delivery of properties,” adding that it has resumed work on 732 projects and delivered 301,000 homes in 2022.
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China real estate woes: Evergrande files for bankruptcy protection in New York
China Evergrande posted a net loss of 476 billion yuan (US$65.2 billion) for 2021, and of 105.9 billion yuan for 2022, according to its filings last month. The filing of annual reports was one of the requirements under the listing rules for the resumption of trading.