Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

China Evergrande gets building demolition order; share trading halted

Economy Jan 03, 2022 12:02PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The China Evergrande Centre building sign is seen in Hong Kong, China, September 23, 2021. REUTERS/Tyrone Siu/File Photo

By Clare Jim

HONG KONG (Reuters) -Cash-strapped property developer China Evergrande Group said on Monday it had been ordered to demolish 39 under-construction residential buildings on the resort island of Hainan, as its shares were suspended from trading.

Evergrande is struggling to repay more than $300 billion in liabilities https://www.reuters.com/business/what-analysts-have-say-about-evergrande-default-risks-rise-2021-09-21, including nearly $20 billion of offshore bonds deemed in cross-default by ratings agencies last month after it missed payments.

Once China's top-selling developer and now at the heart of an unprecedented liquidity squeeze in the property sector, Evergrande has been scrambling to raise cash by selling assets and shares to repay suppliers and creditors.

The world's most indebted developer said late on Monday it had received an order from authorities at Danzhou city in Hainan province on Dec. 30 telling it to demolish 39 under-construction buildings at the Ocean Flower Island project.

It did not disclose the reason for the demolition order.

Reuters could not immediately reach the Hainan provincial authorities outside Asia business hours.

Local media reported earlier the buildings - stretched over 435,000 square meters - needed to be demolished within 10 days for illegal construction and environmental violations.

In a post on WeChat late on Monday, Evergrande said it had been rectifying the environmental issues since 2017.

It told the project's homeowners that it had spent 81 billion yuan ($13 billion) in the past six years to build over 60,000 homes, and the demolition order would not affect the rest of the development.

Ocean Flower Island is a mega resort development, comprising theme parks, convention centres and hotels.

'INSIDE INFORMATION'

Evergrande's shares were suspended from trading earlier on Monday pending the release of "inside information", it said in a Hong Kong stock exchange filing without elaborating.

The developer missed new coupon payments worth $255 million due last Tuesday < VG162759965=>, though both have a 30-day grace period.

As the list of Evergrande's unpaid creditors and suppliers continue to grow, the firm has set up a risk management committee with many members from state companies, and said it would actively engage with its creditors.

On Friday, Evergrande dialled back plans to repay investors in its wealth management products, saying each investor could expect to receive 8,000 yuan ($1,257) per month as principal payment for three months irrespective of when the investment matures.

"The market is watching the asset disposal progress from Evergrande to repay its debt, but the process will take time," said Conita Hung, investment strategy director at Tiger Faith Asset Management.

"And the demolition order in Hainan will hurt the little homebuyer confidence (that) remained in the company."

Evergrande said last week 91.7% of its national projects have resumed construction. Many projects were halted after the developer failed to pay suppliers and contractors.

Shares of Evergrande shed 89% last year, closing at HK$1.59 on Friday.

Its electric vehicle unit China Evergrande New Energy Vehicle Group reversed early losses to rise 11% on Monday, while property management unit Evergrande Services also turned around from the red to rise 1%.

($1 = 6.3521 Chinese yuan renminbi)

China Evergrande gets building demolition order; share trading halted
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (10)
Reggie Zu
Reggie Zu Jan 03, 2022 2:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
china is fake economy until they switch to capitalism and democracy. they literally can force their ppld to buy their own products
Millennial Dip Buyer
Millennial Dip Buyer Jan 03, 2022 2:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Not really, given that the CCP is willing to let evergrande or other property developers fail without assistance.  You never see that in the US, with over 600 companies in the Russell 2k essentially only being able to pay for interest and not operating costs.  I'm not a CCP shill but you can't honestly believe the economy in the west is 'real' or even remotely capitalism anymore.
Empire Destroyer
Empire Destroyer Jan 03, 2022 2:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How's capitalism and democracy working out for you? Trump, stupid ********and gun laws, increasing inequality, stock market overpriced trash, corrupt politicians getting away with everything, two party country, extreme racism, white privilege made into law... literally anything is better than capitalism and democracy atm!
Benjamin USA
Benjamin USA Jan 03, 2022 1:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How big is the hole
Dave Jones
Dave Jones Jan 03, 2022 1:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
big
Kenny Venezia
Kenny Venezia Jan 03, 2022 1:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I wouldn't trust anything they say. China real estate boom went boom. if China's lucky, they'll end up like Japan with stagflation as they keep manufacturing CRAP products. Other emerging markets will see to the end of their huge manufacturing sector and then they will need to step up their invasion of Taiwan. I wouldn't be surprised if Putin and Xi both launch invasions at the same time and right after our midterms
Badis Sonatrach
Badis Sonatrach Jan 03, 2022 1:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
crazy scenario, stop watching movies 🤣
Millennial Dip Buyer
Millennial Dip Buyer Jan 03, 2022 1:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
On the contrary, China is under huge pressure from young workers to lower housing costs, these developers failing and firesaling their assets would do wonders for them.  Again, you'll never see a western government actually do anything meaningful for skyrocketing property costs.
Empire Destroyer
Empire Destroyer Jan 03, 2022 1:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Does that mean MAGA? Or when it's Made In America, only the rich and greedy can afford it?
taylor jason
taylor jason Jan 03, 2022 1:24AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I guess you don't read? both Russia and China have been adamant about expanding their territories. suggesting that will never happen is naive
Steve Bucher
Steve Bucher Jan 02, 2022 10:39PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Shell game. Best to get out regardless the current loss.
Jose Cabreja
Jose Cabreja Jan 02, 2022 9:51PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Rinse n Repeat Fud 🤣🤣🤣
George Jetson
George Jetson Jan 02, 2022 9:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
CCP Chinese junk.
Mah Lee Ong
Mah Lee Ong Jan 02, 2022 9:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
David David  he wouldnt know the difference
Chad RicherThanYou
Chad RicherThanYou Jan 02, 2022 9:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This will soon crash the US markets too
MS MS
MS MS Jan 02, 2022 8:50PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Recycled stories; How about we try to provide context to the story rather than baffling readers?
Mike ND
Mike ND Jan 02, 2022 8:29PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Chinas paper tiger slowly crumbling
Karl Kessler
Karl Kessler Jan 02, 2022 8:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Uh oh...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email