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- By Annabelle Liang
- Business reporter
Image source, Getty Images
Shares in embattled Chinese developer Evergrande have plunged by over 80% as they started trading in Hong Kong for the first time in a year and a half.
The shares have lost more than 99% of their value in the last three years as Beijing cracks down on property firms.
Evergrande is at the centre of a real estate market crisis threatening the world’s second largest economy.
On Sunday, the firm posted a 33bn yuan ($4.5bn; £3.6bn) loss for the first six months of the year.
However, that was an improvement on the 66.4bn yuan loss it reported for the same period a year earlier.
The firm added that its revenue for the first six months of this year had jumped by 44% to 128.2bn yuan from a year earlier. However, its stockpile of cash fell by 6.3% over the same period.
Evergrande shares had been suspended from trading since March last year.
Earlier this month, the company filed for bankruptcy protection in the US to protect its assets there.
Problems in China’s property industry have added to concerns about the post-pandemic recovery of the world’s second largest economy.
Earlier this month, Country Garden, which is also one of China’s biggest property developers, warned that it could see a loss of up to $7.6bn (£6bn) for the first six months of the year.
Rating agency Moody’s downgraded the company’s rating, citing “heightened liquidity and refinancing risks”.
China’s real estate industry was rocked when new rules to control the amount of money big real estate firms could borrow were introduced in 2020.
Evergrande, which was once China’s top-selling developer, had racked up debts of more than $300bn as it expanded aggressively to become one of the country’s biggest companies.
Evergrande has been working to renegotiate its agreements with creditors after defaulting on debt repayments.
Chapter 15 protects the US assets of a foreign company while it works on restructuring its debts.
Evergrande’s financial problems have rippled through the country’s property industry, with a series of other developers defaulting on their debts and leaving unfinished building projects across the country.
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