China Evergrande shares reappear shortly after the developer said contract sales fell 38.7% in 2021

An exterior view of the China Evergrande Center in Hong Kong, China on March 26, 2018.

Bobby Jepp | Reuters

BEIJING – The indebted property developer China Evergrande’s contracted sale plummeted last year when the real estate giant struggled to repay its creditors.

An archive on Tuesday showed that the company̵[ads1]7;s contracted sales of real estate amounted to 443.02 billion yuan ($ 69.22 billion) last year, a decrease of 38.7% from 723.25 billion yuan in contracted sales reported for 2020.

Evergrande shares reopened higher in Hong Kong on Tuesday afternoon, with stocks trying to hold up around 3% before turning lower.

Trading was stopped at 9 a.m. Monday, with shares at $ 1.59 Hong Kong (20 cents) each. It is just above the all-time lowest intraday of 1.42 Hong Kong dollars per share set on December 24, according to FactSet.

The company added that it “will continue to actively maintain communication with creditors, strive to address risks and safeguard the legitimate rights and interests of all parties.”

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Evergrande shares have plunged more than 88% in the last 250 trading days. The company missed payments to creditors in December, Fitch Ratings said, sending the developer into default.

Evergrande is the largest Chinese real estate developer in the issuance of offshore debt denominated in US dollars, which was 19 billion dollars last year. The developer had a total of $ 300 billion in debt as of last year.

The company was China’s second largest developer after sales in 2020.

Like other Chinese real estate developers, Evergrande’s business model is heavily dependent on selling apartments to customers before the units are completed. S&P Global Ratings said in November that an Evergrande default “is highly probable” since the company is no longer able to sell new homes.

Evergrande added that a demolition order for the Ocean Flower Island project only applied to 39 buildings, according to Tuesday’s submission to the Hong Kong Stock Exchange.

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