Shares in Chinese real estate giant Evergrande were delisted from the Hong Kong Stock Exchange today after more than fifteen years of trading. The company failed to meet the rules for resuming trading, according to the BBC. Trading in its shares was suspended on January 29, 2024, when a Hong Kong court ordered the company to be liquidated. According to liquidators, this is the biggest collapse in the history of the Chinese real estate market.
Inevitable end on the stock exchange
According to analysts, the delisting of the shares was inevitable and can be considered final. “Once a company is delisted, there is no way back,” said Dan Wang of the consulting firm Eurasia Group.
In the 18 months since the start of liquidation, Evergrande’s liquidators have sold assets worth approximately $255 million (CZK 5.3 billion) and taken control of more than a hundred of its subsidiaries. Most of Evergrande’s assets and subsidiaries are located outside China, and many of them have already been seized by creditors.
The Chinese real estate market crisis
Only USD 11 million of the sold assets belong directly to Evergrande, with the rest held by its subsidiaries. The liquidators also warned that it may not be possible to transfer all of the USD 244 million in assets held by these companies to the parent company. Only USD 167 million has been transferred so far.
Evergrande and several other developers have been facing liquidation since 2021. They have failed to submit viable restructuring plans or obtain sufficient support from creditors. The Chinese real estate market, which was previously the main driver of growth in the world’s second-largest economy, has been in deep crisis for several years despite repeated government attempts to revive demand. The real estate market has been adversely affected by difficulties related to the slowdown in economic growth and low demand.
Evergrande used to be the largest developer in China. Its shares were listed on the Hong Kong Stock Exchange in 2009.
Source: ÄŒTK
