Oct 19, 2021
No Word on Hopson Deal; Land Goes Unsold: Evergrande Update
(Bloomberg) -- China Evergrande Group investors remain in the dark about the property developer’s progress in negotiating stake sales to meet its looming debt obligations.
Evergrande’s shares have been suspended since Oct. 4 pending the announcement of a “major transaction” involving its property management unit and Hopson Development Holdings, local media reported at the time. Evergrande has yet to make an official statement clarifying the transaction, which REDD Tuesday said had fallen through due to a lack of support from the local Guangdong government.
Evergrande has yet to publicly confirm a Reuters report that a yuan bond coupon due Tuesday had been paid. Chinese companies with bonds listed on mainland stock exchanges are typically only expected to post announcements to the bourses if obligations are not met. Evergrande missed initial interest payment deadlines on several dollar bonds since last month, with a 30-day grace period for some of the notes nearing its end.
China’s cash-strapped developers are becoming reluctant to bid for land during the nation’s property slump. About 27% of land parcels offered by local governments went unsold in September as no developer submitted bids -- the highest rate since at least 2018, according to data compiled by China Real Estate Information Corp., which tracks auctions across 128 Chinese cities.
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- What Is China Evergrande and Why Has Trouble Spread?: QuickTake
Evergrande, Hopson Yet to File Statements (8:00 a.m. H.K.)
Evergrande appears to be struggling to sell stakes in its listed units, which have tumbled in value this year. Shares of the company, its property services unit and Hopson are likely to remain halted in Hong Kong after none of the three firms filed statements to the stock exchange overnight. Negotiations to sell a 51% stake in Evergrande Property Services Group to Hopson have been suspended, REDD reported Tuesday.
A stock can be halted for as long as 18 months before the exchange operator cancels the listing. Halted firms are still required to make regular public disclosures, including quarterly updates on their business operations.
China’s Land Market Slump (5:00 a.m. H.K.)
Land auction failures are on the rise across China. Faced with weakening funding access and rising borrowing costs amid the deepening crisis at Evergrande, many developers have been refraining from replenishing their land holdings. During the latest round of auctions held by local governments, three quarters of transacted parcels were sold at government-dictated base prices versus a premium of 45% before, Jefferies analysts said in a recent note.
Evergrande dollar bond interest deadlines:
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