Share Trading in Embattled China Evergrande Finally Halted in Asia
Today is the day when all lingering doubts and bad anticipations are finally resolved.
All trading activities in securities of heavily indebted China Evergrande (3333.HK) were suspended a few hours ago, bringing the month-long saga to an end, but leaving many more questions unanswered. Shares of its unit Evergrande Property Services Group (6666.HK) were also halted in Hong Kong. The exchange authorities didn't specify the exact reason for their action.
On September 14, the Evergrande Group reported to the Hong Kong Stock Exchange that two of its subsidiaries had defaulted on their 934 million yuan (about $ 145 million) wealth management product warrants. According to the statement, this could have lead to a cross-default (failure to meet obligations before the bondholders is considered a default in any case of treatment), which would “negatively impact operations of the Evergrande Group”. The total volume of its debt obligations exceeds $300 billion, which is viewed as a clear path to hard-to-avoid bankruptcy.
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