Shares trading in Evergrande and Hopson Development were suspended on Monday, causing panic that saw offshore yuan fall 0.3% against the dollar, according to Reuters.
- The share suspension happens as Evergrande is reportedly selling 50% stake in its property unit to Hopson Development for over $5 billion in a bid to raise money in the near term.
- Shares of Evergrande Property Services were also suspended from trading pending the announcement of the major acquisition deal.
- Analysts see Hopson Development as a suitable taker with its shares up 40% year-to-date and profits looking up. The firm was rated B+ in June by Fitch.
- Evergrande shares have tumbled by 80% year to date, with the shares in the property service unit down 43%.
Evergrande Group has been trying to raise money in the face of China’s largest debt restructure estimated at $305 billion.
3333: HKG and 0754: HKG are currently closed for trading.