China Evergrande shares stalled; 'inside information' disclosure firm

Shares in China Evergrande Group were suspended from trading on Monday pending the release of "inside information", the developer said without going into detail.

Evergrande, the developer with the world's largest debt, is struggling to pay off more than $300 billion in liabilities, including nearly $20 billion in international market bonds, which rating agencies deemed a cross-default last month after it missed payments.

The developer missed new coupon payments of $255 million due last Tuesday, although both have a 30-day grace period.

The firm has set up a risk management committee with many representatives from state-owned companies and said it would actively engage with its lenders.

Local media reported last weekend that the city government on the Chinese resort island of Hainan on December 30 ordered Evergrande to demolish its 39 residences within 10 days due to illegal construction.

The reports added that the buildings cover more than 435,000 square metres, citing Evergrande's official notification to the Hainan unit.

Evergrande did not respond to a request for comment on the Hainan development.

Evergrande on Friday withdrew its plans to pay investors for its wealth management products, saying each investor in its wealth management product could expect to receive 8,000 yuan (US$1,257) per month as a basic payment for three months regardless of when the investment comes due.

The move underscores the builder's growing liquidity shortage.

"The market is watching Evergrande's assets move to repay the debt, but this process will take time," said Conita Hung, director of investment strategy at Tiger Faith Asset Management.

"And a demolition order in Hainan will hurt the little homebuyer left in the company."

Evergrande said last week that 91.7 per cent of national projects had resumed construction after three months of effort. Many projects had been stopped earlier because the developer had not paid its many suppliers and contractors.

Evergrande's shares fell 89 per cent last year, closing at HK$1.59 on Friday.

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Its electric vehicle division China Evergrande New Energy Vehicle Group reversed early losses, up 14% in trading on Monday afternoon, while property management unit Evergrande Services also changed from the red by 1%.

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