China Evergrande Group suspends shares in Hong Kong amidst debt crisis

New Delhi: China`s second-biggest property developer Evergrande on Monday said it is suspending shares in Hong Kong. Though the property developer did not cite any reason for the trading halt, it is now widely seen as a move amidst the company's huge debt crisis.

Evergrande Group made an overdue bond payment last week. The property developer's struggle to reduce its 2 trillion yuan ($310 billion) of debt to comply with tighter official curbs on borrowing has prompted fears a default might trigger a financial crisis. Evergrande wired $83.5 million to account for a bond payment that was due September 23.

Evergrande`s stocks plummeted by nearly 90 per cent since July 2020. The real estate bust is going to spell trouble for China`s economy as the housing activity accounts for 29 percent of GDP.

In December Fitch Ratings marked Evergrande Group as restricted defaulteimplying the company is just a notch above a full default which would include bankruptcy and winding-up exercise.

Evergrande has about 200,000 employees, raked in more than $110 billion in sales in 2020, and owns more than 1,300 developments in more than 280 cities, as per a CNN
report.