According to exchange filings, China Evergrande Group and its other units were suspended in Hong Kong on Monday pending an announcement containing “inside information.” According to REDD, the beleaguered developer may hold a conference call this week to update investors on its debt restructuring plan.
In other news, Ronshine China Holdings Ltd. will miss a March 31 deadline to publish audited full-year results after announcing the resignation of its auditor. The value of Ronshine’s stock and bonds plummeted.
According to credit traders, Chinese high-yield dollar bonds traded flat to 2 cents higher, with higher-quality names leading gains. The Bloomberg Intelligence developer index fell 2.6 percent, snapping a three-day stock rally.
- China Evergrande and its subsidiaries have suspended trading in Hong Kong.
- Evergrande May Hold Bond Talks Following Onshore Deal: How Will Credit React?
- Ronshine China claims that an auditor has resigned, causing the audited report to be delayed.
- China’s credit investors are facing billions of dollars in losses and dwindling power.
- Sliding sales and land-spending cuts at Country Garden are expected to continue.
- Fears of Hidden Debt Uncover a Lucrative Lifeline for China Builders
- Moody’s: China’s Property Policy Shift Doesn’t End Default Risks
- Evergrande Unit Receives Bondholder Approval to Delay Coupon Payment
Evergrande to Delay Restructuring Decision: REDD (2:30 p.m. HK)
Evergrande will hold a conference call this week to brief global investors on its restructuring framework, according to REDD, citing two sources familiar with the situation.
According to the report, the call could take place as early as this week. Evergrande did not immediately respond to a request for comment from Bloomberg.
In Hong Kong, Evergrande and Units have been suspended (2 p.m. HK)
According to exchange filings, Evergrande and its other subsidiaries halted stock trading in Hong Kong on Monday. Onshore bonds issued by the company were also suspended.
Evergrande, based in Shenzhen, stated in January that it hoped to present a preliminary restructuring proposal within the next six months. The company has been at the centre of a crisis among Chinese property developers as a result of Beijing’s crackdown on borrowing.
Separately, Evergrande’s onshore unit announced late Sunday that bondholders approved a payment plan for past-due yuan-bond interest, according to a statement on the Shenzhen stock exchange.
Hengda Real Estate Group Co. announced on Sept. 23 that it will distribute unpaid interest on its 4 billion yuan ($629 million) 5.8 percent note maturing in 2025. According to Bloomberg-compiled data, the bond’s coupon is due once a year, with the first payment scheduled for September 23, 2021.
Evergrande will sell 30% of its Nanjing unit (9 a.m. HK)
According to corporate registry search platform Tianyancha, Evergrande Group’s onshore unit will sell its 30% stake in a Nanjing property company to AVIC Trust for an undisclosed sum.
With a registered capital of 66.7 million yuan, the Nanjing property company focused on valuation and management services was established in June 2020. The sale was first reported on Sunday by The Paper.
Ronshine claims that the auditor has resigned in order to postpone the report (8:50 a.m. HK)
As Ronshine becomes the latest Chinese developer to announce the resignation of its auditor, investors are bracing for more delays in the company’s 2021 results.
Ronshine said it will not file results by the end of March deadline because PricewaterhouseCoopers LLC was unable to complete its audit work, in part due to a delay in the supply of requested information, according to a filing to the Hong Kong stock exchange.
Chinese real estate firms listed in Hong Kong have until March 31 to file their annual results, which will be their first audited financial statements since the industry’s liquidity crisis spread. Concerns about transparency and governance have emerged, along with concerns about developers’ ability to repay debt after a record number of defaults last year. Since the beginning of the year, at least four auditors have resigned or been replaced by builders, and global rating agencies have also withdrawn some assessments on property bonds due to insufficient information.
Land Sales Fall in the First Two Months (8:15 a.m. HK)
Local governments’ revenue from land sales in China fell 29.5 percent in January-February compared to the same period a year ago, the biggest drop since at least 2015, when comparable data began, according to Ministry of Finance data released Friday.
The figures highlight the continuing impact of the housing slump on government finances at a time when local governments are under enormous pressure to boost economic growth by spending more on infrastructure. According to Goldman Sachs Group Inc., the combined income from land sales and property-related taxes in the real estate sector fell by 23.5 percent in January-February compared to the previous year, compared to a 0.4 percent gain in December.