Evergrande shares rose after officials’ appointment
Evergrande Group’s shares rose. It happened after the news that it would appoint an official from Cinda Asset Management to its Board.
On Monday, Chinese property developer Evergrande Group’s shares increased after appearing to be the news of an appointment. The report revealed that the company would set an official meeting from a unit of the state asset manager to its Board.
The company’s Hong Kong shares bounced 7.27% to HK$1.93 ($0.26) by 11:44 PM ET (4:44 AM GMT).
Overview of Evergrande’s plans
On Sunday, China Evergrande said to appoint two new board members.
The first is the chairman of China, Cinda (HK) Holdings Co. Ltd, non-executive director Liang Senlin. The second is the chairman of China Evergrande New Energy Vehicle Group Limited, Shawn Siu.
At the end of October 2021, the company said real estate operations are no longer its priority. Instead of that, it would prioritize its electric car business growth.
The two appointments follow the creation of a China Evergrande risk management committee in 2021. Those members mainly include senior officials from state entities, including China Cinda Asset Management.
The report showed that Evergrande has more than $300 billion in liabilities. In fact, it includes nearly $20 billion worth of international bonds considered bankrupt. It accumulated after a run of skipped payments in 2021.
State-owned companies might take over the assets of China Evergrande. Thus, it would be part of a restructuring conducted by the Guangdong provincial government. The appointment is a promising sign that restructuring is progressing.
On Friday, the report from REDD boosted shares. Moreover, it said the provincial government aimed to release a framework debt restructuring plan for the company this year. Also, the company plans to divide its foreign assets. After separating, it intends to sell them to pay foreign debt. It would boost foreign lenders’ hopes of recovering some of their funds.