Shares in Chinese real-estate company Evergrande have plunged after it resumed trading following a 17-month suspension. The big drop highlights China's current problems in the property sector.Chinese property giant Evergrande saw its shares spiral downward by more than 80% in Hong Kong on Monday morning after it resumed trading following a 17-month suspension.

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The debacle, which saw a stock once priced above Hong Kong $30 (€3.54, $3.82) dip to 39 Hong Kong cents, reflects the troubles faced by China's real-estate sector as the world's second-largest economy tries to recover from a post-pandemic slump.

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What has been happening at Evergrande?

Trading in Evergrande shares resumed after the company said on Friday that it had met the necessary guidelines by publishing its financial results and fulfilling other listing rules.

The Hong Kong stock exchange had suspended trading in the company's shares in March 2022 after it failed to publish its 2021 financial results.

Evergrande finally published results for 2021 and 2022 last month. They showed a net loss of more than $113 billion over the two-year period.

The company was once China's biggest real-estate firm but defaulted in 2021. It now has more than $300 billion in liabilities to its name amid a nationwide property crisis.

On Sunday, Evergrande reported losses for the first half of this year amounting to 33 billion yuan (€4.19 billion, $4.53 billion), up from the 66.4 billion yuan in losses in the same period last year. However, its cash assets fell by $2 billion last year to $556 million.

Massive restructuring underway

The company said that it was now restructuring its offshore debts amid what it said was a very volatile market.

Under a proposal to be voted on by creditors on Monday, they will be offered the chance to swap their debt into new notes issued by the company and equities in two subsidiaries, Evergrande Property Services Group and Evergrande New Energy Vehicle Group.

Earlier this month, the company filed for bankruptcy protection in the United States in a bid to protect its US assets during its restructuring.

tj/ab (Reuters, AFP)

(The above story first appeared on LatestLY on Aug 28, 2023 12:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).