Evergrande shares plunge 79% as trade resumes; extends creditor voting
real estate developer, lost $2.2 billion, or 79% of its market value on Monday when it resumed trading following a 17-month suspension to restructure its offshore debt. Evergrande is at the centre of a crisis in property sector of China that has seen a string of debt defaults since late 2021, and its stock has been suspended for 17 months.
Evergrande, which is in the process of getting approvals for its debt restructuring plan, said on Monday that it would postpone by a month meetings for these creditors to vote on the proposal to give more time "to maximise creditor engagement and support informed-decision making". The scheme meetings will now take place on Sept 26, instead of Monday, but three people having direct knowledge of the matter said many creditors had already registered their vote by a deadline last Wednesday to submit forms.
The Shenzhen-based company needs approval from over 75% of the holders of each debt class to approve the plan, which offers creditors with a basket of options to swap debt for new bonds and equity-linked instruments backed by its stocks and those of its Hong Kong-listed units. Evergrande's valuation hit an all-time high of close to HK$420 billion in 2017.
The stock of Evergrande has been suspended since March 21, 2022, and resumed trading on Monday after the firm said it had fulfilled all conditions by the Hong Kong Stock Exchange. Evergrande would have faced delisting if the suspension had reached 18 months.
"Going forward things will continue to be difficult for both its operations and share performance," reported Reuters quoting Steven Leung, Hong Kong-based director of UOB Kay Hian. ="There's little hope that Evergrande can rely on selling houses to repay debt because homebuyers
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