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Hong Kong suspends shares in Chinese property giant Evergrande
Shares in the world’s most indebted property company and several of its subsidiaries were suspended from trading by the Hong Kong stock market regulator as the company promised a plan to deal with its borrowings by the end of July.
Evergrande, which has over $300 billion in loans and liabilities, has been in difficulty for the last year or so since it surfaced that some of its banks were no longer willing to continue extending credit.
In the last 12 months its shares have lost more than 90% of their value.
The developer, which missed interest payments on some of its domestic loans last year sparking a wave of liquidity fears across the Chinese property sector.
Given the importance of the property sector to China’s economy and in particular its role as a savings tool for the country’s growing middle classes, the authorities have been working overtime to ensure any default is ‘orderly’.
Work on many of Evergrande’s hundreds of construction projects has ground to a halt despite efforts by the firm’s owner, once China’s richest man, to restore confidence among investors and suppliers.