China Evergrande’s suppliers have announced that they will suspend loans and halt work as a mark of objection since the developer has not repaid its debts. In a note, they mentioned that small and medium-sized suppliers have fallen into a crisis having spent their entire net worths purchasing materials to supply various Evergrande projects. With the collapse of Evergrande, its suppliers have also landed deep in debt, making it unfeasible for them to continue operations.
Separately, the HKEX has directed Evergrande to dismiss a winding-up petition filed by its credit Top Shine Global, so that its shares resume trading. HKEX also requires Evergrande to conduct an independent probe into its RMB 13.4bn ($1.98bn) pledged by a unit to banks and release its pending financial results to ensure that the trading halt is lifted. Evergrande’s shares have been halted from trading since March 21, 2022. Top Shine Global had filed a winding up petition against the developer in late June as it had not honored a financial obligation of HK$862.5mn ($109.91mn).
Evergrande’s dollar bonds were down over 0.2 points to 5-7 cents on the dollar.