Trading in China Evergrande suspended on HKSEwritten by Bella Palmer
However, China Evergrande New Energy Vehicle Group Ltd. is still trading, Bloomberg reported
Trading in shares of debt-laden China Evergrande was suspended on Monday after it missed a key bond interest payment last week, its second offshore debt obligation in a week, with market watchers jittery as the group's troubles unravel.
Shares of its unit Evergrande Property Services Group were also suspended, according to the Hong Kong stock exchange. However, China Evergrande New Energy Vehicle Group Ltd. is still trading, Bloomberg reported.
According to The Age, the most recent trading price was $HK2.95 (US$0.38), down from a high of $HK17.26 (US$2.22) in January.
Shares in Evergrande have slumped 80% so far this year, while its property services unit has declined 43% as the group scrambles to raise funds to pay its many lenders and suppliers.
According to Bloomberg, the move comes as a dollar note issued by Jumbo Fortune Enterprises worth $260 million comes due. The note reached maturity on Sunday, Oct. 3, which means Evergrande effectively must pay it on Monday. Because the note has no grace period, non-payment of the note would constitute a default, Bloomberg reported.
Hong Kong's markets appear to be reacting negatively to the news. As of 9:48 a.m. on Monday morning, the Hong Kong exchange was down nearly 2% overall.
The trading pause comes after Hong Kong's finance chief told The South China Morning Post that the country's exposure to Evergrande was "minimal."
Financial Secretary Paul Chan Mo-po told the outlet: We have taken stock of the banking sector's exposure to Evergrande, which is only 0.05% of combined assets. It is very minimal and won't cause us any systemic risks.
Evergrande Chairman Xu Jiayin released a separate statement on October 4, addressing the trading halt.
He said: Trading of our company's stocks on the Hong Kong Stock Exchange has been temporarily suspended as of October 4, 9 a.m. This is pending an important announcement from our company about a major transaction.
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