Chinese real estate debt Evergrande urges caution over delay in audit

The indebted Chinese real estate giant Evergrande on Tuesday warned investors to be cautious, after announcing that it will delay the presentation of the results of its 2021 audit, a day after suspending stock trading on the Hong Kong stock exchange.

The company said it would not be able to publish the results of its 2021 audit by the end of March as required by Hong Kong's listing standards.

“Due to the drastic changes in the company's operating environment since the second half of last year (...), together with the effects of the covid-19 outbreak, the company will not be able to complete auditing procedures on time,” Evergrande said in a notice on the Hong Kong stock exchange.

China's policy of curbing excessive indebtedness in the real estate sector has hit Evergrande, one of the country's largest developers carrying $300 billion in debt.

The suspension of trading in your shares will remain in effect until the financial information is published, according to market rules.

It was the second suspension this year and comes before the expiration of a $2 billion commitment to pay on Wednesday and another in April for $1.4 billion.

Evergrande also urged investors on Tuesday to remain cautious “in the face of the operational and financial challenges facing the group and especially the pressure it faces for debt.”

The company has said it will complete ongoing projects and deliver them to buyers in an attempt to save their debt.

Previous efforts to pay suppliers and contractors due to the crisis led to protests by homebuyers and investors at the group's headquarters in Shenzhen, South, in September.

Evergrande's problems have affected the entire Chinese real estate sector and led some small firms to default.

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