Evergrande’s EV unit resumes trading after deal suspension

HONG KONG, CHINA — Shares in the electric vehicle arm of Chinese property giant Evergrande resumed trading on Monday after more than a week’s suspension and a halt on its new share deal triggered by a criminal probe against its boss last month.

Trading in Hong Kong was only open in the afternoon on Monday as the city’s bourse was closed for the morning session due to a typhoon.

Evergrande Vehicle’s shares dipped slightly before climbing more than seven percent by 2:10 pm.

It dropped by nearly nine percent at the close of trading.

Trading of all three Evergrande companies listed in Hong Kong was halted on September 28, when the behemoth confirmed its founder and chairman Xu Jiayin was suspected of “illegal crimes”, following reports of him being held by police.

Evergrande Vehicle was the last to resume trade, one week later than Evergrande Group and Evergrande Property Services, as its deal to issue 6.18 billion new shares for a total consideration of HK$3.89 billion (US$496.72 million) was suspended.

With an estimated debt of US$328 billion at the end of June, Evergrande has become a symbol of China’s ballooning property crisis, which has seen several high-profile firms engulfed in a sea of debt, fuelling fears about the country’s wider economy and a possible global spillover.

And the company warned last month it was unable to issue new debt because its subsidiary, Hengda Real Estate Group, was being investigated. Key meetings planned for debt restructuring were shelved.

Its property arm missed a key bond payment last week, and Chinese financial website Caixin reported that former executives had been detained.

A Hong Kong court is set to continue the hearing for a winding-up petition lodged by Evergrande’s offshore creditors later this month.

— AFP