On Aug. 25, China Evergrande Group was delisted from Hong Kong’s stock exchange.
Earlier in the month, Hong Kong Exchanges and Clearing notified the world’s most indebted property developer that its listing would be cancelled for failure “to fulfill any of the requirements” to resume trading, Evergrande said in a filing. The company subsequently announced it would not request the exchange’s decision be reviewed.
The Guangzhou-headquartered developer’s shares were suspended from trading since January 29, 2024. On that date, the Hong Kong High Court ordered Evergrande’s liquidation for failure to present a viable restructuring plan.
Under HKEX rules, companies suspended for 18 consecutive months are delisted. Ironically, the company only traded for a total of 16 months—riding high on China’s property boom earlier in the decade.
In early August, Evergrande’s court-appointed liquidators, Alvarez & Marsal, presented an overview of its liquidation process during the past 18 months. As of mid-August, liquidators controlled over 100 Evergrande subsidiaries—recovering almost HK$2 billion (about US$255 million), primarily from noncore assets.
Locating and consolidating the company’s domestic and foreign assets continues, though complicated ownership structures and onshore insolvencies may ultimately restrict creditor recoveries. Investigations culminated in substantial legal claims, with 187 proofs of debt totaling about HK$350 billion submitted. Formal claim adjudication, however, will only happen when a dividend is possible. The local press reported that the figure was substantially larger than the US$27.5 billion in liabilities disclosed in Evergrande’s December 2022 financial statement.
China’s 2021 three red lines policy was designed to deleverage debt heavy developers and cool domestic housing prices. The initiative hurt Evergrande which had over US$300 billion in liabilities. Evergrande defaulted on its offshore bonds in late 2021, leading to worldwide fears of contagion from the mainland’s sharp real estate decline.
According to Ross Feingold, a Taipei political risk analyst, the matter “is a reminder that despite being listed in a jurisdiction with fairly robust laws and listing rules, under analyst coverage by major investment banks, periodically issuing debt to sophisticated global investors, and a general perception that it was a sophisticated manager of its finances, much can still go wrong.”
