Shares in crisis-hit property giant jump

Shares in crisis-hit Chinese real estate giant Evergrande have jumped as trading in the firm resumed after being suspended in Hong Kong.

The company halted trading in its shares on Thursday as it confirmed that its billionaire founder was being investigated by authorities.

Evergrande shares soared by more than 40% in early trading on Tuesday before closing 28% higher.

It defaulted on its debts in 2021, triggering a property crisis in China.

The latest share suspension came just a month after the firm’s previous 17-month trading halt was lifted.

“There is currently no other inside information in relation to the company that needs to be disclosed,” Evergrande said in a statement to the Hong Kong Stock Exchange on Monday, when the city’s market was closed for the National Day holiday.

In August, Evergande’s shares plunged by almost 80% when trading resumed after a suspension of more than a year and a half.

The firm’s stock market valuation has fallen by almost 99% since July 2020, with it shares now worth around HK$ 0.35 ($0.05; £0.04) each.

Once China’s top-selling property developer, the company has been struggling under the weight of more than $300bn (£248bn) of debt.

Evergrande sent jitters through the global financial markets when it failed to make payments on its overseas debts in late 2021.

The crisis deepened last week when it revealed that its flagship Chinese business Hengda Real Estate was unable to sell new debt as it was being investigated by authorities.

The development further complicated the company’s plan to renegotiate agreements with its bondholders.

Just days later, the company confirmed that its founder and chairman Hui Ka Yan was “subject to mandatory measures in accordance with the law due to suspicion of illegal crimes.”

In August, Evergrande filed for Chapter 15 bankruptcy protection in the US. Chapter 15 protects the US assets of a foreign company while it works on restructuring its debts.

Some analysts have said the latest setbacks have increased the risk that the company will be unable to agree a restructuring plan with its creditors.

Evergrande faces a court hearing in Hong Kong on a winding-up petition which could potentially force it into liquidation. The hearing, which was scheduled for July, is now due to take place on 30 October.

— Reports /TrainViral/