Trading of China Evergrande Group's shares has been suspended in Hong Kong pending the release of "inside information." Sources with knowledge in the matter said the heavily indebted real estate company would, reportedly, be unveiling its restructuring plan in the coming days.
The world's most indebted property developer has been struggling to repay its estimated $300 billion in liabilities, which includes nearly $20 billion worth of international bonds. Rating companies have deemed China Evergrande's international bonds to be in default following several missed payments.
Over the past few months, the Chinese company had missed numerous bond payments, leading to a crash in investor confidence in its liquidity and future prospects.
The company's stock price had dropped by more than 89% last year due to growing concerns over its liquidity and growing debt. The stock closed at HK$1.59 per share on Friday before trading was suspended.
China Evergrande's EV unit, China Evergrande New Energy Vehicle Group, saw its shares surge by around 14% Monday. Share prices of its property management subsidiary, Evergrande Services, also rose by 1% in early trading Monday.
Last week, the company missed new coupon payments worth an estimated $255 million. The company has been scrambling to liquidate its assets and shares to repay agitated supplies and creditors.
China Evergrande revised its plans to reimburse investors in its wealth management products on Friday, stating that each investor may expect to receive $1,257 per month as principal payment for three months, regardless of when the investment matures.
The company had previously refused to provide a figure and committed to reimbursing 10% of the money when the product matured at the end of the month. China Evergrande said on its wealth unit's website that the situation was not ideal and that it will aggressively raise cash and revise the repayment plan in late March.
Evergrande said that after three months of work, 91.7% of its nationwide projects had restarted construction. Many projects have been suspended in the past as a result of the developer's failure to pay its numerous suppliers and contractors.
Apart from not being able to pay its suppliers, the company has had difficulty completing several of its projects because of other reasons. Over the weekend, local media reported that the municipal administration of Hainan, a Chinese resort island, had ordered Evergrande to dismantle its 39 residential complexes within 10 days owing to unlawful construction.
Chinese officials previously expressed their unwillingness to bail out the company and its wealthy founder, stating that it would be against President Xi Jinping's "Common Prosperity" plans.
