Evergrande shares left the Hong Kong stock market Monday. This ended over fifteen years of trading. It is a sad moment for China’s former top property firm. Its value once topped $50 billion. This was before its huge debt caused its downfall. Experts believe the delisting was final and unavoidable. “Once delisted, there is no coming back,” said Dan Wang of Eurasia Group. Evergrande is now known for its role in a long-running crisis. The crisis has affected China’s economy for years.
A few years ago, Evergrande Group was a success story. Its founder, Hui Ka Yan, started with little. He became one of Asia’s richest men in 2017. His wealth then dropped from an estimated $45 billion. Now it is less than one billion. His fall mirrored his company’s collapse. In March 2024, Mr. Hui was fined $6.5 million. He was banned from China’s markets for life. His company faked revenue by $78 billion. Liquidators are trying to recover funds from Mr. Hui’s personal assets.
At its peak, Evergrande had 1,300 projects. These were in 280 Chinese cities. The company also owned an electric car maker. It also owned China’s top football team, Guangzhou FC. The team was removed from the league this year. They did not pay enough debts.
Evergrande borrowed $300 billion. This made it the world’s most indebted developer. Problems started after China added new rules in 2020. These rules limited developer borrowing. Evergrande then sold properties cheaply. This was to bring in cash. The firm struggled to pay debts. It eventually defaulted on foreign debts.
Hong Kong’s High Court ordered the company’s closure in January 2024. Evergrande shares faced delisting after this. Trading had been halted since the court order. The company’s stock value had dropped over 99%. The liquidation order followed Evergrande’s failure to propose a debt repayment plan. Liquidators reported Evergrande’s debts are $45 billion. They have only sold $255 million in assets. They do not expect a business turnaround.
“The delisting now is surely symbolic but it’s such a milestone,” Ms. Wang stated. Professor Shitong Qiao of Duke University noted that the focus is now on creditors. They want to know who gets paid and how much. A new liquidation hearing is set for September.
China faces many economic issues. These include trade tariffs, high government debt, and low consumer spending. However, experts say Evergrande’s failure has hurt the economy most. “The property slump has been the biggest drag on the economy,” Ms. Wang commented. This slump also limits consumer spending.