As the court adjourns the winding-up hearing, Evergrande shares tumble 20% to an all-time low.
Evergrande shares fell to an all-time low of 18.8 Hong Kong cents (2.4 US cents) after a Hong Kong judge delayed a court hearing to wind up the company.
Evergrande’s stock fell more than 20% from last Friday’s close of 23.6 Hong Kong cents to an all-time low of 22.2 Hong Kong cents early Monday, before recovering marginally to 22.2 Hong Kong cents.
According to Reuters, Hong Kong’s High Court Justice Linda Chan pushed up the hearing from Oct. 30 to Dec. 4, which would be the final before a judgment on the winding up order is issued.
Evergrande must submit a fresh restructuring proposal by that date or the business would likely be dissolved, she warned.
According to papers from Hong Kong’s High Court, Top Shine, a stakeholder in Evergrande affiliate Fangchebao, filed a winding-up petition against the property business in June 2022, but the suit was placed on hold due to Evergrande’s reorganization.
This is the latest setback for the company, which was once China’s largest private sector developer by sales.
Evergrande disclosed in late September that its director and executive chairman were being investigated for possible crimes.
Hui Ka Yan “has been subject to mandatory measures in accordance with the law due to suspicion of illegal crimes,” Evergrande stated in a Hong Kong Stock Exchange statement.
Evergrande had previously delayed a debt restructuring meeting and said that the group’s sales had fallen short of expectations since its March debt restructuring announcement.
As a result, Evergrande felt it was necessary to re-evaluate the parameters of the planned restructuring “to meet the company’s objective situation and the demand of the creditors,” the company stated.
On top of that, Evergrande was unable to issue additional notes under its debt restructuring plan owing to a September probe into subsidiary Hengda Real Estate.