The shares of the Chinese real estate company Evergrande have returned to listing on the Hong Kong Stock Exchange after a suspension of almost a year and a half with the loss of almost all of its valuation. At 8:30 a.m. Spanish time, Evergrande shares were down 78% to HK$0.35.
Its stock market valuation has been reduced to just over 500 million euros from the 2,500 million it registered at the time of the suspension. The promoter was worth more than 50,000 million euros in 2017 before its problems began. Experts hope that Evergrande’s return will allow it to reopen additional sources of liquidity with capital increases.
The Chinese company informed the market on Sunday about its results for the first half of the year, where it registered a net attributable loss of 33,012 million yuan (4,191 million euros), half of what it lost in the first half of 2022. Asian company reached 128,067 million yuan (16,256 million euros) until June, which represents an increase of 43% compared to the first half of last year.
At the end of the first half of 2023, Evergrande’s debts exceeded 2.38 trillion yuan (302,183 million euros), which is 2% less than at the end of 2022. Last July, Evergrande published its overdue financial statements corresponding to the years 2021 and 2022, in which the company registered accumulated losses of 581,211 million yuan (73,769 million euros at the real exchange rate).
In detail, the Chinese real estate giant suffered losses of 476,095 million yuan (60,431 million euros) in the 2021 financial year, managing to reduce these losses in 2022 to 105,116 million yuan (13,372 million euros). In 2020, the Chinese real estate company had obtained an attributed net profit of 8,076 million yuan (1,027 million euros).
debt restructuring
The release of the overdue financial reports is part of Evergrande’s efforts to go public again, after trading in its shares was suspended in March 2022. The troubles for Evergrande began two years ago, when the company China admits liquidity difficulties and default risks.
The company recently filed for bankruptcy protection under Chapter 15 of the US Bankruptcy Law in a court in New York. Chapter 15 protects the company’s assets in the United States while restructuring agreements are negotiated in other jurisdictions.
International debt restructuring agreements sometimes require a Chapter 15 filing as part of the process. Evergrande’s application relates to ongoing restructuring proceedings in Hong Kong and the Cayman Islands.
The Chinese construction company has been working to finalize a plan to restructure its debt outside of China. In July, it won court approval to vote on the deal and meetings are scheduled to take place later this month.
In March, Evergrande announced a plan to restructure a part of its offshore debt, which at that time amounted to approximately 140,284 million yuan (17,702 million euros).
