The Chinese real estate group took over Thursday, Hong Kong, stock exchanges on its actions. Their course immediately collapsed.
Le Monde with AFP
The situation does not improve for Evergrande: the Chinese real estate group, considerably indebted and whose potential bankruptcy could shake the economy of the Asian country, has seen its action collapse, Thursday, October 21, on its return in Stock Exchange in Hongkong.
This promoter, one of the biggest of China – which has the Guangzhou Football Club resulted up by the Italian Fabio Cannavaro, former central defender and world champion 2006 -, dragged a slate from about 260 billion euros.
The course of the Evergrande share fell by 10.5% Thursday during the first exchanges on the Hong Kong Stock Exchange, a sign of the low confidence that investors still give the Moribond group.
This dive is in the context of the announcement by the company of the sale of the sale of 50.1% of the capital of one of its subsidiaries to another Chinese promoter, Hopson. The case could have reported 2.2 billion euros.
Evergrand has suspended its quotation in Hong Kong on October 4 after several mishandles of loan repayments.
The group had announced on Wednesday evening that stock exchanges on its action would resume this Thursday, while warning that it could “not be able to honor its financial obligations”.
waiting for A Beijing reaction
Dozens of injured owners, having not received delivery from their apartment, as well as unpaid suppliers had shown in September in front of the Group’s headquarters in Shenzhen (South China).
Evergrande “will continue to implement measures to mitigate [its] liquidity problems,” the real estate developer was assured of the reassurance investors.
Despite a storm in September on the financial markets, worried about the impact of a potential bankruptcy of the group, Beijing has not yet been clear whether or not to help the company.
Evergrande, which has launched in recent years in a wide-round diversification, has been struggling for several weeks to honor its interest payments and deliveries of apartments.
In addition to real estate, the group, sure of its financial force, had invested in tourism, digital, insurance, health or the electric car, which partly explains its abyssal debt.
The poor health of Evergrande is only one of the symptoms of the globally seized Chinese real estate sector.
Fall of real estate in China
The prices of new housing are thus folded for the first time in six years, in a context of mistrust of buyers facing the risk of bankruptcy of several promoters.
In 70 large and medium-sized cities of China, the rates were thus oriented over one year in September, the National Office of Statistics (SNB) indicated on Wednesday, without giving a specific percentage.
According to the calculations of the Bloomberg agency, prices fell on average by almost 1%. A small revolution while the real estate sector has long been one of the locomotives of the Chinese economy with the construction of millions of housing. A frenzy stimulated by the need for most Chinese to access the property, almost mandatory step before a wedding.
Faced with the swelling of the debt in real estate, the regulators imposed last year to the sector “Three red lines”, prudential ratios to reduce the use of the debt of the promoters. The most weakest of them struggles, since then, to maintain their activities.
At the end of September, Evergrande was unable to honor loan repayments, totaling $ 131 million (€ 113 million). And in October, the group could not honor a third loan of $ 148 million (€ 127 million).
Evergrand has a grace period of thirty days for each loan. The deadline of the first payment falls on October 23, this Saturday.
Beijing tried to reassure last week on the group’s health. The Chinese central bank felt that the situation of Evergrand was certainly delicate, but that the risk of contagion to the financial system was “manageable”.
