(Bloomberg) — China Evergrande Group’s property management firm plunged by a record as stock trading resumed for the first time since March 2022, wiping around $1.6 billion off the company’s market value in Hong Kong.
Evergrande Property Services Group Ltd. fell as much as 50% Thursday morning. The resumption of trading came after the company met regulatory requirements by releasing delayed earnings results.
The unit of China’s most indebted developer reported in June a net income of 1.42 billion yuan ($200 million) for 2022, versus a net loss of 316.3 million yuan in the previous year.
The selloff came after its sister firm, Evergrande Group’s new energy vehicle unit, also tumbled when its own shares resumed trading last week for the same reason. Ending the trading halt for the property management arm would help creditors gauge the merits of its defaulted parent’s proposal to swap debt for equity in the unit as part of a restructuring.
China Evergrande New Energy Vehicle Group Ltd.’s market value has shrunk by nearly $2.2 billion since its trade resumption.
Evergrande Services Unit Posts $200 Million Profit for 2022 (1)
Under the restructuring plan laid out in March, Evergrande bondholders would receive new bonds maturing in 10 to 12 years or a combination of new notes and instruments tied to the shares of the property-services arm.
China Evergrande received court approval to hold votes on its offshore-debt restructuring plan in later this month, with meetings scheduled in Hong Kong on Aug. 23 and 24. Trading of its own shares has yet to resume after a suspension started in March 2022.
The developer first defaulted on a dollar bond in December 2021 following months of uncertainty about its debt-repayment capabilities. That began what has been expected to be one of China’s most complicated debt restructurings.
Source : YahooFinance