Struggling property developer China Evergrande Group’s main unit, Hengda Real Estate Group, applied on Thursday to suspend trading of its onshore corporate bonds following a rating downgrade, as the country’s second-largest property developer wrestles with a liquidity crisis, reports Reuters.
According to the South China Morning Post, three yuan-denominated bonds valued at RMB 28.2 billion ($4.4 billion) issued by Hengda Real Estate Group were restricted to negotiated transactions on the Shanghai Stock Exchange. On the Shenzhen stock exchange, six bonds valued at RMB 25.3 billion were relegated to the high-volume block transactions.
The debt-ridden developer is facing possible defaults on its liabilities, which total $300 billion. After protests at the companies headquarters last week, over worries around the group’s high-yield investment products, company executives revealed to investors that the Ding Yumei, wife of the group’s billionaire founder, paid $3 million for its wealth management products in a bid to reassure shareholders fearful that they could lose their money, reports the Financial Times.
Chan Hoi Wan, a key shareholder in the company sold an additional HK$87.5 million ($11.2 million) of shares in the group, underscoring investor concern over the Chinese developer’s escalating troubles, reports Caixin. Chan sold 24.4 million shares at an average price of HK$3.58 ($0.46) each last Friday, according to a Hong Kong exchange filing. That reduced her stake in the real estate company to 7.96% from 8.15%.