Trading Suspended; Ronshine Auditor Resigns: Evergrande Update

(Bloomberg) — China Evergrande Group and its other units were suspended in Hong Kong Monday pending an announcement containing “inside information,” according to exchange filings that didn’t elaborate further. The embattled developer may hold a call this week to brief investors on its debt restructuring plan, REDD reported.

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Elsewhere, Ronshine China Holdings Ltd. won’t meet a March 31 deadline to publish audited full-year results after it became the latest property firm to announce the resignation of its auditor. Ronshine’s stock and bonds plunged.

Chinese high-yield dollar bonds traded flat to 2 cents higher with better quality names leading gains, according to credit traders. Property firms snapped a three-day stock rally, as the Bloomberg Intelligence gauge of developers fell 2.6%.

Key Developments:

China Evergrande and Its Units Suspend Trading in Hong Kong
Evergrande May Hold Bond Talks After Onshore Deal: Credit React
Ronshine China Says Auditor Resigns, to Delay Audited Report
China Credit Investors Face Billions in Losses, Shrinking Power
Country Garden’s Sliding Sales, Land-Spending Cut Set to Persist
Hidden Debt Fears Unravel Lucrative Lifeline for China Builders
China’s Property Policy Shift Doesn’t End Default Risks: Moody’s
Evergrande Unit Gets Bondholders’ Nod to Delay Coupon Payment

Evergrande to Hold Call on Restructuring: REDD (2:30 p.m. HK)

Evergrande will hold a call this week to brief global investors on its restructuring framework, REDD reported, citing two sources briefed on the matter.

The call might take place early in the week, according to the report. Evergrande didn’t immediately respond to a Bloomberg request for comment.

Evergrande and Units Suspended in Hong Kong (2 p.m. HK)

Evergrande and its other units suspended stock trading in Hong Kong Monday, according to exchange filings. The company’s onshore bonds were also suspended.

Shenzhen-based Evergrande said in January that it aimed to present a preliminary restructuring proposal in the next six months and has been at the center of a crisis among Chinese property developers following Beijing’s crackdown on borrowing.

Separately, Evergrande’s onshore unit said bondholders approved a payment plan regarding overdue yuan-bond interest, according to a statement on the Shenzhen stock exchange late Sunday.

Hengda Real Estate Group Co. said it will distribute unpaid interest Sept. 23 for its 4 billion yuan ($629 million) 5.8% note maturing 2025. The bond’s coupon is due annually, and the first payment was scheduled for Sept. 23, 2021, according to Bloomberg-compiled data.

Evergrande to Sell 30% of Nanjing Unit (9 a.m. HK)

Evergrande Group’s onshore unit will sell its 30% stake in a Nanjing property company to AVIC Trust for an undisclosed sum, according to data from corporate registry search platform Tianyancha.

The Nanjing property company, focused on valuation and management services, was set up in June 2020 with registered capital of 66.7 million yuan. The sale was earlier reported by The Paper on Sunday.

Ronshine Says Auditor Resigns, to Delay Report (8:50 a.m. HK)

Investors are bracing for more delays in Chinese developers’ 2021 results as Ronshine becomes the latest to announce the resignation of its auditor.

Ronshine said it won’t file results by the end of March deadline as PricewaterhouseCoopers LLC was unable to complete its audit work partly because the supply of requested information had fallen behind schedule, the real estate firm said in a filing to the Hong Kong stock exchange.

Chinese property firms listed in Hong Kong face a March 31 deadline to file annual results, their first audited financial statements since the industry’s liquidity crisis spread. Transparency and governance concerns have cropped up alongside worries about developers’ ability to repay debt following a record number of defaults last year. At least four auditors have resigned or been replaced by builders since the start of this year, and global ratings firms have also pulled some assessments on property bonds due to insufficient information.

Land Sales Slump in First Two Months (8:15 a.m. HK)

Chinese local governments’ revenue from land sales contracted 29.5% in January-February from the same period a year ago, the biggest slump for the period since at least 2015 when comparable data began, data from the Ministry of Finance showed Friday.

The figures underscore the impact the continued housing slump is having on government finances at a time when local authorities are under enormous pressure to bolster economic growth by spending more on infrastructure. Goldman Sachs Group Inc. estimates that combined income from land sales and property-related taxes from the real estate sector shrank by 23.5% in January-February from a year ago, versus a 0.4% gain in December.