Evergrande has been struggling to avoid defaulting on billions of dollars of debt
Shares in troubled real estate developer China Evergrande Group and its property management unit Evergrande Property Services were suspended from trading Monday in Hong Kong.
The companies’ filings did not specify why the shares were stopped from trading.
Cailian, a Chinese online news service affiliated with the state-run newspaper Securities Times, said another developer, Hopson Development Holdings, was planning to acquire a majority share in Evergrande Property Services Group.
Trading in Hopson’s shares also was suspended Monday in Hong Kong, pending the release of announcement(s) in relation to a major transaction of the company under which the company agreed to acquire the shares of a company listed on the stock exchange, it said in a filing.
Hopson’s public relations department said the company would not comment on market rumours.
Evergrande has been struggling to avoid defaulting on billions of dollars of debt. The company owes billions to banks, customers and contractors and is facing a cash crunch.
Its situation worsened after the government tightened limits on corporate debt levels.
In August 2020, the government ordered tightened controls on financing for China’s 12 biggest developers, forcing them to reduce corporate debt loads that are seen as a threat to the economy.
The company ran up billions of dollars in debt building apartment complexes, malls and office towers over the years.
Evergrande has been selling off various assets to try to alleviate the problem. Its shares have lost more than 80% of their value this year.
Like Evergrande, Hopson, based in Guangdong adjacent to Hong Kong, is one of China’s biggest property companies. Reports show it has a much lower debt to equity ratio than its largest rivals.
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