Evergrande shares sink after saying it is unable to issue new debt
economictimes.indiatimes.comShares of China Evergrande plunged as much as 24% on Monday after the embattled developer said it was unable to issue new debt due to an ongoing investigation into one of its subsidiaries, dealing a fresh blow to its restructuring plans.
«In view of Hengda Real Estate Group Co Ltd, a principal subsidiary of the company, being investigated, the group is unable to meet the qualifications for the issuance of new notes under the present circumstances,» Evergrande said in a statement late on Sunday.
In August, Hengda Real Estate said it was being investigated by China's securities regulator for suspected violation over the disclosure of information.
The development opens a new front for the world's most indebted company just a week after police detained some staff at its wealth management unit, sending its shares slumping and piling more pressure on Evergrande's restructuring plans.
Shares of Evergrande, which has more than $300 billion in liabilities, fell as much as 23.6% to HK$0.42, in a broader market down 0.6%.
Earlier this month, Evergrande said it had delayed making a decision on offshore debt restructuring from September to next month to allow holders of its debt more time to consider its proposal.
Evergrande needs approval from more than 75% of the holders of each debt class to approve the plan, which offers creditors 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.
Prominent developers such as Country Garden Holdings continue to teeter close to default, keeping home-buyer sentiment depressed and prompting Beijing to implement a raft of measures to prop up the sector and spur property demand.
The crisis in the property sector,
