HONG KONG, Jan 27 ― Shares of China Evergrande Group tumbled today, as investors in the debt-laden developer were sceptical of the company's thinly detailed plan to have a preliminary restructuring proposal in place in six months.
Once China's top developer, Evergrande has racked up debts of more than US$300 billion (RM1.26 trillion) and is struggling to repay creditors, suppliers and investors in wealth management products.
Late yesterday, Evergrande's executives told creditors in a call it hoped to work with them to achieve a risk management solution, and it would treat all categories of creditors “fairly and follow international practice”. The company also urged creditors not to take any “aggressive legal actions.”
But some bondholders were disappointed by the 25-minute call, which included prepared answers to questions, saying it failed to give any insight on Evergrande's plans.
Evergrande's shares dropped 9.6 per cent to HK$1.60 ($0.2054), the lowest in nearly two weeks, at 0157 GMT.
That compared to a 1.7 per cent drop in the benchmark Hang Seng Index and a 2.5 per cent decline in the Hang Seng Mainland Properties Index.
The long-awaited communication with creditors comes against the backdrop of Beijing tightening control over the property developer, while taking measures to stabilise China's crisis-hit property sector.
Evergrande missed some dollar bond payments last month, sparking calls for talks, and nearly US$20 billion of its international bonds are now deemed to be in default. ― Reuters
