By Gina Lee
Investing.com – Shares of China Evergrande Group's (HK:3333) in Hong Kong were suspended on Monday after some bondholders said the developer missed a second key bond interest payment in the past week.
Shares of Evergrande Property Services Group (HK:6666), a China Evergrande unit, were also suspended on the same day, according to the Hong Kong Stock Exchange. However, no reason for either suspension was given and it was unclear which party initiated them.
China Evergrande shares plunged 80% so far in 2021, while those for Evergrande Property Services Group have dropped 43% as the company scrambles to raise funds to pay its lenders and suppliers.
Although the People’s Bank of China eased some initial worries after it owed to protect homebuyers’ interests, the Hong Kong suspension re-ignited concerns in the market. The offshore yuan was knocked a little lower and the Hang Seng Index slid 2.49% by 12:09 AM ET (4:09 AM GMT).
With the company already having missed two offshore payments in September, worries are mounting about whether the company can meet the deadlines on dollar bond coupon payments totaling $162.38 million in October 2021.
China Evergrande said on Sep. 30 that its wealth management unit made a 10% repayment of wealth management products due on the same day. The company has been prioritizing domestic creditors over offshore bondholders.
The Chinese government also reportedly tapped state-owned firms and state-backed property developers, both directly or indirectly about purchasing some of China Evergrande’s assets, according to Reuters.