(Bloomberg) — China Evergrande Group is down as much as 87% in Hong Kong trading after a 17-month hiatus, turning into a small stock as the country’s most indebted developer posted more losses.
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The plunge to HK$0.35 on Monday morning reduced its market capitalization to just HK$4.6 billion ($586 million) from a peak of more than $50 billion in 2017.
The company, which is going through a lengthy debt restructuring process, reported a loss attributable to shareholders of 33 billion yuan for the six months ended June 30, according to a filing on the Hong Kong Stock Exchange on Sunday. That adds to more than 582 billion yuan in losses in the previous two years, which was the first year-on-year since its listing in 2009.
Evergrande has applied to resume trading after it said its improved internal control systems and processes met its obligations under the Hong Kong listing rules. The stock last traded on March 18, 2022, at which point the company lost more than 95% of its market value from its peak.
The first-half results came before the creditors’ meetings scheduled to start on Monday, and highlight Evergrande’s struggles during the housing crisis that has rocked the world’s second-largest economy over the past two years.
Read a preview of creditor meetings
With China cracking down on its booming real estate industry to lower risks and make homes more affordable, many developers have been hurt. Evergrande’s largest peer, Country Garden Holdings Co., is on the verge of default and is also expected to post a loss in the first half.
Evergrande’s total net loss during the first half was 39.3 billion yuan, according to a filing on Sunday. The developer also reported total commitments of 2.39 trillion yuan at the end of June. Excluding contract liabilities of 604 billion yuan, the amount was 1.78 trillion yuan, up from 1.72 billion yuan in 2022.
The company said in its statement that Evergrande has total assets of 1.74 trillion yuan, including total cash and cash equivalents and restricted cash of 13.4 billion yuan.
The results give offshore bondholders more to digest when they consider the company’s debt restructuring proposal. The troubled real estate giant also requested creditor meetings to approve the foreign debt reform plan on Monday.
In April, the developer said that investors who own 77% of Class A bonds support the plan, while only 30% of Class C holders support it.
The financial results were reviewed by Prism, a small accounting firm named as Evergrande’s auditor in January after PwC’s resignation. Prism did not issue a conclusion on the interim earnings report, citing several uncertainties.
– With assistance from Alice Huang, Charlotte Yang, and Xin Chen.
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