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Hindustan Times
4 days ago
- Business
- Hindustan Times
Evergrande to delist in milestone for China housing crisis
(Bloomberg) -- China Evergrande Group said its Hong Kong stock will be delisted, marking the end of an era for the former high-flying developer whose demise came to symbolize the country's property bust. China Evergrande Group said its Hong Kong stock will be delisted, marking the end of an era for the former high-flying developer whose demise came to symbolize the country's property bust. (Photo for representational purposes only)(AP) The Guangzhou-based company said the stock exchange has decided to cancel its listing, according to a filing to the Hong Kong bourse on August 12. The shares will be removed on Aug. 25 and the company won't apply for a review of the exchange's decision, it added. Evergrande's collapse was by far the biggest in a crisis that dragged down China's economic growth and led to a record spate of distress among builders. The company, which first defaulted on a dollar bond in December 2021, was once the country's largest developer by sales, and was worth more than $50 billion in 2017 at its peak. In a separate filing on August 12, court-appointed liquidators said Evergrande's debt load is far bigger than earlier estimated, and any 'holistic' restructuring is out of reach. The clock started ticking for the delisting in late January last year, when Evergrande received a liquidation order from a Hong Kong court and trading of its shares was suspended. It has remained halted since then, having failed to meet requirements for a resumption of trading. In Hong Kong, a stock can be delisted if suspension lasts 18 months or longer. The move will further diminish hopes for any recovery for Evergrande's shareholders, who have seen the value of their investment evaporate in recent years. Shares of Evergrande last traded at less than 20 Hong Kong cents on Jan. 29, 2024, giving it a market value of HK$2.15 billion ($274 million). The stock has had a low free float, with its founder Hui Ka Yan owning a roughly 60% stake. 'Whether or not there's a delisting, Evergrande's shareholders will likely have to prepare for near-total loss,' Kristy Hung, a Bloomberg Intelligence analyst, said before the announcement. 'The developer's liquidation and substantial claims from creditors who are ahead in the order suggests equity holders face material risk of getting nothing.' Delisting risks Several other Chinese developers face similar delisting risks, according to the latest tally by the bourse. They include mid-sized builders Modern Land (China) Co., which has been suspended for more than 16 months, and Dexin China Holdings Co., which received a liquidation order in June last year. To resume trading, some of them will have to file more updated audited results, have winding-up petitions withdrawn or dismissed, or have any liquidators discharged. 'The golden era of real estate is gone,' said Glen Ho, Asia-Pacific contingency planning and insolvency leader at Deloitte. 'The business model for builders has totally changed.' Evergrande still has two other units listed in Hong Kong — a property service provider and an electric vehicle maker. China Evergrande New Energy Vehicle Group Ltd., which has been suspended since April, could be delisted, Bloomberg Intelligence analysts Andrew Chan and Daniel Fan wrote in a recent note. Following its 2009 listing under the ticker 3333, Evergrande rose to become one of China's hottest stocks in its heyday, powering founder and chairman Hui to become Asia's second-richest person. Much of Hui's known wealth was derived from his controlling stake in Evergrande and the cash dividends he received from the company. Beijing's crackdown on the property sector since 2020 capped the developer's borrowing capacity, effectively cutting it off from credit markets. Following failed restructuring attempts, Evergrande was given a winding-up order in Hong Kong in 2024. Later that year, a mainland Chinese court accepted a liquidation application filed against one of its major onshore units. Evergrande's debt pile amounts to $45 billion, according to the developer's court-appointed liquidators. The company is facing 187 debt claims, with the total amount far exceeding the $27.5 billion of liabilities disclosed in its financial statement in December 2022, the liquidators said in a progress report released on Tuesday. The new figure isn't to be taken as final since additional claims could emerge and all are subject to formal review. The liquidators said the realization of assets has so far been 'modest' at $255 million. Some $167 million has been 'upstreamed' and linked to Evergrande. Stakeholders shouldn't assume that all of the money will be available to the company due to complex ownership structures, they said. --With assistance from Venus Feng, Pearl Liu, David Hall and Foster Wong. (Updates with details of debt load from fourth paragraph) More stories like this are available on ©2025 Bloomberg L.P.
Business Times
4 days ago
- Business
- Business Times
Evergrande to delist in milestone for China housing crisis
[HONG KONG] China Evergrande Group said that its Hong Kong stock will be delisted, marking the end of an era for the former high-flying developer whose demise came to symbolise the country's property bust. The Guangzhou-based company said that the stock exchange has decided to cancel its listing, according to a filing to the Hong Kong bourse on Tuesday (Aug 12). The shares will be removed on Aug 25 and the company will not apply for a review of the exchange's decision, it added. Evergrande's collapse was by far the biggest in a crisis that dragged down China's economic growth and led to a record spate of distress among builders. The company, which first defaulted on a US dollar bond in December 2021, was once the country's largest developer by sales, and was worth more than US$50 billion in 2017 at its peak. In a separate filing on Tuesday, court-appointed liquidators said that Evergrande's debt load is far bigger than earlier estimated, and any 'holistic' restructuring is out of reach. The clock started ticking for the delisting in late January last year, when Evergrande received a liquidation order from a Hong Kong court and trading of its shares was suspended. It has remained halted since then, having failed to meet requirements for a resumption of trading. In Hong Kong, a stock can be delisted if suspension lasts 18 months or longer. The move will further diminish hopes for any recovery for Evergrande's shareholders, who have seen the value of their investment evaporate in recent years. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Shares of Evergrande last traded at less than 20 Hong Kong cents on Jan 29, 2024, giving it a market value of HK$2.2 billion (S$360 million). The stock has had a low free float, with its founder Hui Ka Yan, owning a roughly 60 per cent stake. 'Whether or not there's a delisting, Evergrande's shareholders will likely have to prepare for near-total loss,' Kristy Hung, a Bloomberg Intelligence analyst, said before the announcement. 'The developer's liquidation and substantial claims from creditors who are ahead in the order suggests equity holders face a material risk of getting nothing.' Delisting risks Several other Chinese developers face similar delisting risks, according to the latest tally by the bourse. They include mid-sized builders Modern Land (China), which has been suspended for more than 16 months, and Dexin China Holdings, which received a liquidation order in June last year. To resume trading, some of them will have to file more updated audited results, have winding-up petitions withdrawn or dismissed, or have any liquidators discharged. 'The golden era of real estate is gone,' said Glen Ho, Asia-Pacific contingency planning and insolvency leader at Deloitte. 'The business model for builders has totally changed.' Evergrande still has two other units listed in Hong Kong, a property service provider and an electric vehicle maker. China Evergrande New Energy Vehicle Group, which has been suspended since April, could be delisted, Bloomberg Intelligence analysts Andrew Chan and Daniel Fan wrote in a recent note. Following its 2009 listing under the ticker 3333, Evergrande rose to become one of China's hottest stocks in its heyday, powering founder and chairman Hui to become Asia's second-richest person. Much of Hui's known wealth was derived from his controlling stake in Evergrande and the cash dividends he received from the company. Beijing's crackdown on the property sector since 2020 capped the developer's borrowing capacity, effectively cutting it off from credit markets. Following failed restructuring attempts, Evergrande was given a winding-up order in Hong Kong in 2024. Later that year, a mainland Chinese court accepted a liquidation application filed against one of its major onshore units. Evergrande's debt pile amounts to US$45 billion, according to the developer's court-appointed liquidators. The company is facing 187 debt claims, with the total amount far exceeding the US$27.5 billion of liabilities disclosed in its financial statement in December 2022, the liquidators said in a progress report released on Tuesday. The new figure is not to be taken as final since additional claims could emerge and all are subject to formal review. The liquidators said the realisation of assets has so far been 'modest' at US$255 million. Some US$167 million has been 'upstreamed' and linked to Evergrande. Stakeholders should not assume that all of the money will be available to the company due to complex ownership structures, they said. BLOOMBERG
Business Times
23-06-2025
- Business
- Business Times
China asks state-owned developers to avoid public debt defaults
China has introduced a requirement for state-owned developers to avoid defaulting on publicly issued debt, in the latest attempt by authorities to contain the nation's prolonged property crisis. The State-owned Assets Supervision and Administration Commission (SASAC) added the directive to its latest performance metrics for about 20 developers that are controlled by the central government, people with knowledge of the matter said, asking not to be identified discussing a private matter. The commission did not respond to a faxed request for comment on Monday (Jun 23). While the regulator has so far stopped short of providing additional support to backstop the developers, the new stipulation underscores growing urgency to contain credit risks from China's protracted property downturn. Most of the biggest private developers have defaulted since 2021, shattering confidence in the housing market and leaving a pile of distressed debt that currently stands at almost US$140 billion. So far, state-owned developers have avoided the same fate, and their onshore bonds are trading at levels that suggest bondholders expect repayment. The companies overseen by SASAC range from leading firm Poly Developments & Holdings Group to smaller builder CCCG Real Estate. SASAC sets financial indicators for state-owned enterprises such as total profit and the ratio of debts to assets. While there's no guaranteed way to prevent SOEs from defaulting without higher-level intervention, the requirements are designed to ensure officials at the helm remain accountable for performance. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up One major developer, China Vanke, received state support in January, although that was led by local authorities in the company's hometown of Shenzhen. Vanke, which is backed by a local SOE, is not considered a central government-controlled developer. China's housing slump has dragged on for four years, with little sign of improvement. Prices of new homes slid the most in seven months in May, and sales also fell, signalling the effects of a stimulus blitz last September is wearing off. Like their privately owned peers, SOE developers have felt pressure from slumping sales. Last year, some resorted to steep price cuts to rekindle transactions. 'China's state-owned and private developers are both susceptible to a possible renewed property sales downturn,' Bloomberg Intelligence analyst Kristy Hung wrote in a recent note. She warned that state-owned builders face the risk of a full-year decline in sales this year. Central government-owned developers mostly rely on domestic financing, and the majority of their onshore bonds trade near or at par. Poly's 3.17 per cent yuan bond due next year even traded above par last week. But when considering those owned by local governments, yields of yuan bonds of state developers were the highest among 32 sectors, standing above 2.2 per cent in May, according to a note by China International Capital Corp. Some smaller firms are struggling. CCCG Real Estate, which operates under a state-owned infrastructure enterprise, has been on the brink of delisting from the Shenzhen stock exchange since April. It's the first listed state builder to be warned by the exchange for such risk. CCCG Real Estate expanded quickly in the three years since 2019, when it made a bold target to triple sales. Later, it booked two straight years of losses that left it with negative net equity, breaching the bourse's listing rules. To avoid delisting, it agreed to sell its entire real estate business to its parent firm for one yuan (S$0.18), according to an exchange filing on Jun 16. Still, all of CCCG Real Estate's 5 yuan bonds were trading above 98 yuan last week, Bloomberg-compiled data show. Premier Li Qiang this month pledged action to stop the decline in the real estate market, which has been depressing household sentiment just as the government is trying to boost consumption and offset the threat to exports from US tariffs. Even if China's housing market picks up, the long-term outlook remains grim. Demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years, due in part to a shrinking population, Goldman Sachs Group estimated. BLOOMBERG
Business Times
06-06-2025
- Business
- Business Times
Country Garden's May sales drop 28% with no revival in sight
[BEIJING] Country Garden Holdings' sales slide intensified in May, with the developer faring worse than the broader China housing sector. The Foshan-based company, once China's largest property firm, reported monthly sales that dropped 28 per cent from a year earlier to about 3.1 billion yuan (S$555.03 million), Bloomberg calculations based on filings from Friday show. The decline was from an already low base, and was much steeper than the 8.6 per cent drop in new home sales posted by the country's top 100 developers. Falling consumer prices in China are eroding corporate profits and employee income, leading to suppressed demand for home purchases, just as the effects of a stimulus blitz last September start to wear off. Buyers remain concerned about developers' ability to finish projects on time, leading new-home sales to drop since March after a brief period of stabilising. Country Garden has been counting on a turnaround in sales as the 33–year-old developer continues lengthy restructuring talks more than a year after defaulting on its debt. Yet its efforts to win backing for a US$14.1 billion offshore restructuring are running into resistance after a key group of banks said failure to accept some of their demands would be a 'deal breaker,' according to a court hearing last month. The builder needs support from three-quarters of debt holders in two individual groups – bank lenders and bondholders. It has said that it has backing from holders of 70 per cent of bonds, but even if it gets more from that class, it still needs bank creditors to get on board to pass the plan through a 'scheme of arrangement' procedure. It has been given a few months' reprieve from its liquidation petition hearing, with the next one set for Aug 11. The builder said it has seen stabilisation signs in a number of cities, according to a statement citing a May management meeting. But analysts remain concerned. Country Garden's contracted sales could face 'a protracted contraction on waning buyer sentiment in China's low-tier cities,' Bloomberg Intelligence analysts Kristy Hung and Monica Si wrote in a May report. BLOOMBERG
Business Times
29-04-2025
- Business
- Business Times
China Vanke's quarterly loss widens to 6.25 billion yuan after overhaul
[NEW YORK] China Vanke's first-quarter loss widened, underscoring the property developer's challenges even after the government in its hometown of Shenzhen stepped in to take control of operations. The company reported a net loss of 6.25 billion yuan (S$1.1 billion) in the three months ended in March, steepening from a 362 million yuan loss a year earlier, according to a Hong Kong exchange filing on Tuesday (Apr 29). The loss stemmed mainly from declines in home settlements and gross margins, Vanke said in the filing. Margins dropped to 6.1 per cent from about 10 per cent last year, according to Bloomberg calculations on reported figures. As part of a government-led overhaul in January, Vanke's two top executives stepped down and an official from Shenzhen Metro Group, its largest state shareholder, took over as chair. The loss followed significant write-offs in the final quarter last year. Bloomberg Intelligence (BI) said Vanke's contracted sales risk dropping 30 per cent this year due to weakening buyer confidence and a shrinking supply pipeline, according to a note earlier this month. 'This could result in a 74 billion yuan shortfall in its sales proceeds this year versus last year,' Kristy Hung, a property analyst at BI, wrote in the note. 'A deepening cash crunch raises the stakes in any rescue.' A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Other key figures: Revenue declined 38 per cent to 38 billion yuan Total cash slipped to 75.5 billion yuan from 88.2 billion yuan at end-2024 Vanke's sold but unbuilt inventory was worth about 219 billion yuan at the end of March Liquidity support Shenzhen Metro plans to lend Vanke 3.3 billion yuan to help it repay bonds in the open market. The loan, with a three-year term, charges a floating rate that stands at 2.34 per cent as at Tuesday. The developer also plans to sell some treasury shares to replenish liquidity. Vanke has 26.3 billion yuan of onshore and offshore bonds maturing this year, Bloomberg-compiled data showed. 'This year should remain tough for Vanke's earnings due to subdued profitability of presold projects in prior years and increased asset impairments,' said Jeff Zhang, an analyst at Morningstar. 'However, we expect a bottom-line turnaround in 2026 as the gross margins of projects acquired since 2022 have improved materially.' BLOOMBERG
