(Bloomberg) – He announced that his actions in Hong Kong will be removed from the bag, marking the end of an era for the former developer who, at its height, symbolized the boom of the real estate market in the country.
The company, headquartered in Guangzhou, said that the stock exchange decided to cancel its listing, as a statement sent to the Hong Kong scholarship on Tuesday (12). The shares will be removed on August 25 and the company will not request a review of the scholarship, he added.
Evergrande’s collapse was by far the largest in a crisis that affected China’s economic growth and led to a record wave of difficulties between builders. The company, which gave its first dollar default in December 2021, was once the country’s largest developer in sales and was worth more than $ 50 billion in 2017 at its peak.
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In a separate statement today, the court -appointed liquidators said Evergrande’s debt is much larger than previously estimated, and that any “holistic” restructuring is out of reach.
The deadline for withdrawing the scholarship began to count at the end of January last year, when Evergrande received a settlement order from a Hong Kong Court and the negotiation of its actions was suspended. Since then, negotiations remain stopped, as the company has not met the requirements for resumption of business. In Hong Kong, an action can be removed from the bag if the suspension lasts 18 months or more.
The measure further decreases hopes for recovery for Evergrande shareholders, who have seen the value of their investments evaporate in recent years.
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Evergrande’s shares were last negotiated less than 20 cents from Hong Kong dollar on January 29, 2024, which gave the company a market value of HK $ 2.15 billion ($ 274 million). The company had a low Float Float, with its founder Hui Ka Yan holding about 60% of the shares.
“Regardless of the bag’s withdrawal, Evergrande shareholders will probably have to prepare for an almost total loss,” said Kristy Hung, an analyst at Bloomberg Intelligence before the announcement. “The settlement of the developer and the substantial claims of creditors who have priority indicate that shareholders face a material risk of receiving nothing.”
“Golden was over”
Other Chinese developers face similar risks of being removed from the bag, according to the last survey of the bag. These include medium -sized builders such as Modern Land, which has been suspended for over 16 months, and Dexin China Holdings, which received a settlement order in June last year.
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To resume negotiations, some of them will have to present updated audited results, have requests for settlement withdrawn or rejected, or have the liquidants dismissed.
“The golden age of the real estate market is over,” said Glen Ho, leader of Deloitte contingency and insolvency planning to Asia-Pacific. “The business model for the developers has totally changed.”
Evergrande still has two other units listed in Hong Kong – a real estate service provider and an electric vehicle manufacturer. China Evergrande New Energy Vehicle Group Ltd., which has been suspended since April, can be removed from the bag, Bloomberg Intelligence’s analysts Andrew Chan and Daniel Fan wrote in a recent statement.
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After its listing in 2009 under code 3333, Evergrande became one of China’s hottest actions at its height, boosting the founder and president Hui to become the richest second person in Asia. Much of Hui’s known wealth came from his majority participation in Evergrande and the money dividends he received from the company.
Beijing’s repression to the real estate sector since 2020 has limited the capacity of loans of the developer, effectively cutting access to credit markets. Following failed restructuring attempts, Evergrande received a settlement order in Hong Kong in 2024. In the same year, a mainland court accepted a settlement request against one of its main onshore units.
$ 45 billion debt
Evergrande’s debt total US $ 45 billion, according to the liquidators appointed by the court.
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The company faces 187 debt claims, with the total amount far higher than US $ 27.5 billion of liabilities released in its December 2022 balance, the liquidants said in a progress report released on Tuesday. The new value should not be considered final, as other claims may arise and all are subject to formal review.
The liquidants said the active holding so far has been “modest”, totaling $ 255 million. About $ 167 million were “transferred” and linked to Evergrande. Those involved should not assume that all this money will be available to the company due to complex ownership structures, they added.
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