(News Bulletin 247) – Evergrande shares plunged this Monday as the group can no longer issue bonds due to an investigation into one of its subsidiaries.
Real estate group China Evergrande plunged on the Hong Kong Stock Exchange on Monday after saying it was unable to issue new loans due to an ongoing investigation into one of its subsidiaries, a new blow to the project restructuring its debt.
“Due to the ongoing investigation into Hengda Real Estate Group, the company’s main subsidiary, the group is unable to fulfill the conditions required for the issuance of new bonds under the current circumstances,” Evergrande wrote in a press release published Sunday evening.
In August, Hengda Real Estate said it was under investigation by Chinese authorities for allegedly violating its financial reporting obligations. This announcement constitutes a new setback for Evergrande, just one week after the arrest of certain employees of its wealth management division.
An agreement to be finalized
Evergrande shares, whose liabilities amount to more than $300 billion, lost up to 23.6% on Monday to 0.42 Hong Kong dollars, the lowest since September 6, against a decline of 0.6% for the Hang Seng index.
Evergrande announced in early September the postponement of its decision on the restructuring of its offshore debt until October, in order to allow its creditors more time to examine its proposal.
The agreement of more than 75% of the holders of each category of Evergrande’s debt is necessary for the implementation of the restructuring plan, which offers creditors a set of options to exchange the debt against in particular new bonds.
(With Reuters)
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
