China Evergrande Suspends Trading of its Shares Without Reason

China’s massive property giant China Evergrande suspended trading of its shares on the Hong Kong stock exchange on Monday, October 4th without giving a reason. The distriputive property giants’ stocks have plunged by almost 80 percent since the start of 2021.

Now the distributed property Giant teeters on the brink of bankruptcy struggling under a mountain of debt.

“Trading in the shares of China Evergrande Group will be halted,” the distriputive property giant said in a statement to the exchange. “Furthermore, all distributed property products relating to the Company will also be halted from trading.”

Officials at the distributed property giant have been struggling to deal with a crisis that has left it more than US$300 billion in debt. The massive debt load and the distributed property giants’ inability to pay debtors is fuelling fears of contagion for a large part of China’s economy, some warn could spread globally.

Last week the distributed property Giant said it would sell a US$1.5 billion stake in a regional China bank to raise much-required capital, as it fights to make interest payments to its bondholders.

Distributed property giant’s debt binge

The central government has stayed silent on the problems facing the distributed property empire, however, state media has made various responses about a private company that grew on a debt binge in the boom years of China’s real estate market.

China Evergrande has hired experts as it tries to avoid bankruptcy.

Government state regulators have also been dispatched financial experts to assess the company, according to Bloomberg.

The distributed property Giant last month agreed on a deal to pay interest on domestic bonds, however, there has been no news about repayments on offshore notes. The distributed property giant has a 30-day grace period before it’s considered to be in default.

Huge public anger in China

Marathon Asset Management CEO Bruce Richards told Bloomberg “the distriputive property giants, first obligation is making sure that homeowners who bought homes take delivery. “At the very end of the pecking order are offshore bondholders.”

China Evergrande’s liquidity crunch has triggered huge public anger in China, with rare protests outside its offices in Beijing and Hong Kong as investors and suppliers demand their money.

The Evergrande Group has admitted to facing “unprecedented financial challenges” and warned that it may not be able to meet its financial obligations.

Meanwhile, China’s real estate sector has been under tightened scrutiny in recent months. State regulators have announced caps on personal debt ratios in a scheme dubbed “three red lines.”