By P.R. Venkat
China Evergrande shares tumbled sharply Monday after resuming trading on the Hong Kong Exchange after more than a year.
Shares fell as much as 87% to 0.220 Hong Kong dollars (3 U.S. cents) after one of the world’s most indebted developers fulfilled listing obligations set by the Hong Kong Exchange, which includes publishing its financial reports.
The slide is the worst drop the stock has experienced since its listing in Hong Kong in late 2009.
On Sunday, the company announced that it had posted CNY33.01 billion in losses for the first six months of the year, with revenue increasing nearly 44.0% to CNY128.18 million.
Despite the company’s loss narrowing, the sharp share price drop is indicative o the overall dour sentiment toward the real-estate sector, which is suffering from weak property sales and eroding consumer confidence.
Evergrande’s mounting cash-flow problems saw it default on debt payments and failing to meet contractual obligations like paying its contractors and suppliers.
The company’s total liabilities at the end of June amounted to CNY2.39 trillion, Evergrande said, adding that it will expedite the restructuring of offshore debts and work toward protecting the long-term interests of various creditors.
Write to P.R. Venkat at [email protected]
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