China Evergrande Group will be delisted from the Hong Kong Stock Exchange later this month, marking the final chapter for the world’s most indebted property developer after its collapse triggered a crisis across China’s real estate sector.
The exchange’s Listing Committee decided to cancel the company’s listing from the start of trading on Aug. 25, Evergrande said in a filing Tuesday evening. Its last trading day will be Aug. 22, and it is not seeking a review of the decision.
The move follows a trading suspension of nearly 19 months that began on Jan. 29, 2024, when the Hong Kong High Court ordered the company to be wound up following a petition by offshore creditors. Trading was halted that day, and two Alvarez & Marsal Inc. managing directors were appointed liquidators.
Evergrande’s removal cements the downfall of a developer whose 2021 default shook global markets and marked the end of China’s debt-driven property boom. For overseas creditors and shareholders, delisting closes the door on any faint hope of a market rescue, leaving them to navigate a complicated liquidation likely to return only a fraction of their investment.
Under exchange rules companies suspended from trading for 18 consecutive months face delisting. Evergrande failed to meet the conditions for resumption outlined in March 2024: overturning the winding-up order and discharging liquidators; proving viable operations and adequate assets; disclosing all material information for investors.
With minimal offshore liquidity, largely halted operations and no workable restructuring plan, delisting became inevitable once liquidation began without a rescue investor, a Hong Kong lawyer noted.
The delisting itself won’t affect the liquidation process and Evergrande said its liquidators would update creditors on a dedicated website when appropriate.
As of the end of July, total offshore realizable assets stood at about $255 million, with only $11 million directly held by the parent company. The rest is controlled by subsidiaries across multiple jurisdictions, entangled in complex internal transactions and contested by outside creditors.
Liquidators have so far recovered about $167 million, calling the process “formidable” due to the corporate structure’s complexity and the competing claims.
Evergrande’s debt crisis became systemic in late 2021. That December, it failed to honor a $260 million guarantee on a private bond, triggering cross-defaults on all its U.S. dollar debt. After more than a year of negotiations, Evergrande unveiled a preliminary offshore restructuring plan on March 22, 2023.
Despite court approvals in Hong Kong, the Cayman Islands and the British Virgin Islands, the deal collapsed on Sept. 24, 2023. Evergrande said it could not issue new notes after China’s Securities Regulatory Commission opened an investigation into Hengda Real Estate Group, its key mainland unit. Four days later, founder and Chairman Hui Ka Yan, whose name is Xu Jiayin in Mandarin, was placed under investigation for suspected criminal activity. Offshore creditors later failed to agree on terms, including the handling of equity and claims.
Contact reporter Han Wei (weihan@caixin.com)
