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The Chinese real estate giant Evergrande announced today, Monday, the suspension of the listing of its shares on the Hong Kong Stock Exchange, without explaining the reasons for this move.
The stock price of the heavily leveraged company has plunged about 80% since the start of the year, when the company is on the verge of bankruptcy.
The company said in a statement: “The shares of the Chinese group Evergrande will be suspended” from the Hong Kong Stock Exchange, adding that “accordingly, the trading of all products related to the company will also be suspended at the same time.”
But the listing of the group’s electric carmaker, which last week canceled a listing on the Shanghai Stock Exchange, has not been suspended, as its shares fell 6% in the first listing.
This comes in conjunction with the news that the Chinese real estate company has reached a deal to sell 51% of its property management arm Evergrande Property Services to Hopson Development Holdings for $ 5 billion.
Last week, Evergrande announced plans to sell its $ 1.5 billion stake in a regional Chinese bank, as it struggles to pay interest to its bondholders.
It is feared that the scenario of the American bank “Lehman Brothers”, whose bankruptcy caused the crisis in the United States in 2008, will repeat itself in China, the second largest economy in the world.
All eyes are on the Chinese government, which has not indicated whether it intends to intervene on behalf of the panel or not.
Chinese officials have asked local governments to prepare for a possible collapse of the Evergandy Group, reports said that a major government bailout is unlikely.
The group’s lack of liquidity has led to rare such protests outside its offices in China, as investors and suppliers demand their money back.
The group acknowledged that it was facing “unprecedented challenges”, warning that it might not be able to meet its obligations.
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