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Shares of China’s Top Debt-Ridden Real Estate Developer Plummet by $2 Billion Following Trading Resumption

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China Evergrande Group, a prominent property developer, has announced an extension of the voting record time for its offshore debt restructuring plan, which has had a significant impact on its market value.

In a filing, the company revealed that the voting record time has been prolonged until September 20 from its original date of August 23. Scheme meetings with creditors, originally scheduled for August 28, have been adjourned to September 26.

Upon the resumption of trading on August 28, the company’s shares suffered a drastic decline, resulting in an 80% decrease in market value, equivalent to $2 billion, as reported by Reuters.

China Evergrande is seeking approval from over 75% of debt holders for each debt class to support the proposed plan. The plan offers creditors a range of options, including debt-to-bond swaps and equity-linked instruments backed by the company’s shares and those of its Hong Kong-listed units.

The company has been grappling with a crisis involving debt defaults, unfinished homes, and unpaid suppliers.

Trading of China Evergrande shares had been suspended since March 21, 2022. The resumption of trading occurred after the company fulfilled the conditions set by the Hong Kong Stock Exchange.

On August 17, China Evergrande filed for Chapter 15 bankruptcy protection in a U.S. Court.

Related: Evergrande’s US Chapter 15 Filing: A Calculated Move Amid China’s Looming Property Crisis?

Most recently, China Evergrande reported a net loss of RMB(33.0) billion ($4.53 billion) for the first half of the fiscal year 2023. This represents an improvement compared to a net loss of RMB(66.4) billion in the previous year, thanks to higher revenues (RMB 128.2 billion compared to RMB 89.3 billion a year ago).

Source: Benzinga.com

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