Shares in Evergrande fell a further 14% on Tuesday after more than $2bn was wiped off the Chinese property developer’s market value when it resumed trading for the first time in almost 18 months on Monday.
Evergrande, the world’s most indebted property firm with liabilities of $328bn (£260bn), has lost more than 99% of its share market value over the past three years.
The company resumed trading on the Hong Kong stock exchange on Monday after a 17-month suspension that Evergrande used to try to restructure its offshore debt.
However, investors immediately wiped more than four-fifths off the market value of the company, which last month reported a combined loss of $81bn for 2021 and 2022.
On Sunday, the company, which is at the centre of a real estate crisis as fears grow over the wider state of the world’s second largest economy, reported a 33bn yuan ($4.5bn) loss for the first six months of the year.
Evergrande, which is facing more than 2,000 lawsuits involving about 535bn yuan, has delayed for another month meetings with international creditors that were expected to lead to a vote on a restructuring plan this week.
The company, which defaulted in 2021, laid out a plan earlier this year to compensate investors with notes linked to its listed Hong Kong subsidiaries, which include an electric vehicle company and a property management business.
Earlier this month, Evergrande filed for chapter 15 bankruptcy protection in New York to protect its US assets as the company hopes to restructure its finances.
With the world’s biggest property market in disarray as developers including Evergrande fail to complete projects, leaving suppliers unpaid and homebuyers out of pocket, China’s wider economy is coming under increasing pressure.
China is the world’s biggest property market and there are fears financial difficulties could spread to other parts of the economy.
The country’s post-Covid economic recovery has been flagging across many sectors, with youth unemployment at a record high and weak retail sales. The economy has fallen into deflation for the first time in two years.
Earlier this month, Country Garden, once China’s largest private developer by sales, missed payments on its international bonds, triggering a 30-day grace period.
On Tuesday, the company asked creditors for a 40-day extension to pay an outstanding principal on a 3.9bn yuan bond.
Country Garden, which has liabilities of almost $200bn, is holding a meeting on the 31 August to vote on the extension to the payment due on 4 September.
The company missed interest payments of $22.5m on two $500m international bonds earlier this month.
