Shares of ailing Chinese real estate giant Evergrande have been shut down on the Hong Kong Stock Exchange. The company says that happened pending an announcement about a major transaction.
Various media outlets, including the Chinese state newspaper Global Times, report that 51 percent of the company’s real estate branch is being sold. The buyer would be another major Chinese property developer, Hopson Development. The deal would bring Evergrande about 4 billion euros.
260 billion euros debt
The company’s total debt is estimated at around 260 billion euros. The company is struggling to pay the interest on its loans and has too little cash in hand to pay suppliers. A bankruptcy of the second largest project developer in China is imminent.
The fear is that Chinese banks, especially the smaller local banks, suppliers and other real estate companies could run into problems due to the bankruptcy of Evergrande. That could lead to a financial crisis in Asia and beyond.
Trading in shares of the company’s car manufacturing arm has continued in Hong Kong.
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