China property giant Sunac plummets in Hong Kong stock trading return
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The sell-off in Sunac shares has revived concerns about China’s debt-plagued developers and a hobbling housing market recovery.
PHOTO: REUTERS
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HONG KONG – Property giant Sunac China Holdings suffered a record plunge in Hong Kong trading on Thursday after a year-long suspension, in the latest blow to China’s beleaguered real estate developers.
The stock collapsed as much as 59 per cent on its first day of trading on the Hang Seng Index after being suspended on April 1 last year. The shares were down 53.5 per cent to HK$2.13 at the midday trading break.
The drop has revived concerns about China’s debt-plagued real estate developers and a hobbling housing market recovery.
Sunac joined the growing list of crumbling developers in May 2022 when it said it had missed a US$29.5 million (S$39 million) interest payment and warned of more defaults.
Trading in the firm was suspended after it missed a deadline in March last year to publish its annual results.
But the restriction was lifted on Thursday after Sunac met exchange requirements by filing the overdue earnings figures.
Sunac proposed plans to restructure debt worth US$9.1 billion in December that included converting up to US$4 billion of offshore liabilities into ordinary shares or equity-linked instruments.
The rest of the debt was to be swapped for new dollar-denominated bonds, with maturities ranging from two to eight years and no interest payments for the first two years, according to a filing with the Hong Kong stock exchange.
In March, the developer announced it had reached an agreement with a group of creditors but analysts were sceptical about the plan, saying Sunac would struggle to win approval from offshore creditors.
Since 2020, Beijing has cracked down on excessive debt in the property sector, leaving major players such as China Evergrande Group and Sunac struggling to make payments and forcing them to renegotiate with creditors as they teetered on the edge of bankruptcy.
The crisis deepened in 2022 after buyers across the country, furious at lagging construction and delayed deliveries of their properties, withheld mortgage payments for homes sold before completion. AFP
