Evergrande halts trading on the Hong Kong Stock Market - Hong Kong Stock Exchange withdrawl confirmed by Evergrande
In a significant development, Evergrande Group, once the largest construction company in China, is set to exit the Hong Kong Stock Exchange after failing to meet the exchange's requirements to resume trading within 18 months of suspension.
Liquidation and Delisting
A Hong Kong court ordered Evergrande's liquidation on January 29, 2024, following the company's failure to present a viable restructuring plan. Since then, its shares have been suspended from trading. The company officially announced it will exit the stock market on August 25, 2025, marking the end of its journey on the exchange.
Asset Recovery and Challenges
Liquidators have recovered only about $255 million in assets over 18 months, including a Claude Monet painting. This limited value retrievable underscores the scale of Evergrande's liabilities.
Symbolic Decline and Industry Impact
Evergrande's downfall symbolizes the challenges facing China's property sector after years of rapid expansion. The crisis sets a precedent as other developers also face liquidation. The "golden era of real estate" in China is considered over, and this development underscores the broader persistence of difficulties in China’s real estate market despite government efforts to stabilize it.
No Clear Recovery Plan
With the company under liquidation and asset recovery ongoing, there are no announced plans for Evergrande to restructure or continue business operations. The focus is on asset liquidation to address creditor claims.
Lawsuit Against Auditors
In a separate development, the insolvency administrators of Evergrande Group have filed a lawsuit against the auditors of Pricewaterhouse Coopers (PwC) and its Chinese branch. The details of this lawsuit have not been disclosed.
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The Commission, observing the financial turmoil in the real estate industry, has decided to initiate proceedings against Evergrande Group for a declaration that it has failed to fulfill its obligations under Article 85 (3) of the Treaty, due to its business operations leading to its exit from the Hong Kong Stock Exchange.
In light of the ongoing liquidation process and limited recovery of assets, financial institutions worldwide are bracing for potential impacts on their portfolios, given the tumultuous state of the industry.
