China's second-largest property developer, Evergrande Group, is temporarily suspending trading in its shares on the Hong Kong stock exchange, local media said.
The China Evergrande Group trading will be suspended starting at 9 am (local time) on Monday, according to a statement released by the Hong Kong stock exchange. Trading of structured products related to the firm will also stop, China state media Global Times reported.
Last month, Evergrande said it was going to sell its shares in the Shengjing Bank for around USD 1.5 billion.
Evergrande, China's second-biggest, is marred with debt it cannot pay back. The embattled developer owes a total of USD 368 billion in loans to banks, along with liabilities to contractors and suppliers. Experts believe that declining sales, a high-risk business model, and China's clampdown to curb the boom in the Chinese housing market brought the company into crisis.
Earlier in June, Evergrande owed USD 304 billion. Since the beginning of this year, Evergrande's shares, which are traded in Hong Kong, fell by 82 per cent.
Debts plaguing China's top property giant Evergrande Group are a wake-up call for the country's economy.
Emily Feng, writing in Washington based NPR said that the buyers of an estimated 1.4 million Evergrande units all over China are now uncertain whether the properties they paid for will ever be built.
Dozens of angry and worried investors picketed Evergrande's headquarters in the southern city of Shenzhen for weeks. They had bought investment products from Evergrande that now look nearly worthless, as its Hong Kong-listed stock plummeted by nearly 90 per cent in value this year.
( With inputs from ANI )
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