China Evergrande Group’s shares, burdened by heavy debt, were removed from the Hong Kong Stock Exchange on Monday, marking a stark downfall for the once-thriving property giant.
Earlier in the month, a bourse committee decided to delist Evergrande after it missed the July deadline to recommence trading, which had been halted since early last year.
This delisting highlights the ongoing struggles of a company that has become emblematic of China’s persistent property market challenges.
Once China’s largest real estate company, Evergrande was valued at over $50 billion at its height, significantly contributing to the nation’s economic expansion in recent decades.
However, it defaulted in 2021 after years of financial difficulties in repaying creditors.
In January 2024, a Hong Kong court issued a winding-up order against Evergrande, stating the firm failed to propose an adequate debt repayment plan.
Liquidators have initiated steps to recover creditor investments, including suing PwC and its Chinese branch for their audit involvement with the indebted developer.
The company’s debt exceeds the previously estimated $27.5 billion, according to a recent filing by liquidators Edward Middleton and Tiffany Wong.
The filing also noted that China Evergrande Group is a holding company, with liquidators taking control of over 100 subsidiaries.
Evergrande’s downfall, alongside similar issues with other property leaders like Country Garden and Vanke, is closely watched by analysts evaluating the health of the world’s second-largest economy.
Following a long construction boom driven by rapid urbanization, China’s property market started showing troubling signs in 2020 when Beijing imposed new borrowing limits.
With Evergrande’s default in 2021 and ongoing industry complications, the return to prosperous years remains challenging for policymakers.
This crisis has also weakened consumer confidence as economists urge China to pivot toward a growth model focused more on domestic consumption than investment.
In July, official data indicated that new home prices continued to decline in a survey of 70 Chinese cities.
