Evergrande stock has soared 35% in the past week as the embattled property developer sells assets to pay its debts
- Shares of China
EvergrandeGroup have soared as much as 35% since its unfolding debt crisis shocked the stock marketlast week.
- Evergrande has been selling assets to raise cash and make its upcoming debt payments.
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China Evergrande Group stock has soared as much as 35% since the world's most indebted property developer shocked markets last week with its unfolding debt crisis.
Shares of the Hong-Kong listed company surged from a low of HK$2.27 last week to HK$3.07 on Wednesday. The thinly traded OTC listed stock for Evergrande soared as much as 46% on Wednesday, and is up as much 63% in the past week.
The company has more than $300 billion in liabilities, and after it missed interest payments on several bank notes last week, its overall health has been called into question since it has billions in debt coming due in the next year.
But the company is taking steps to raise cash and meet its debt obligations, despite several missed payments that are likely being renegotiated with creditors. Evergrande plans to raise $1.5 billion by selling its stake in a Chinese bank to a state-owned enterprise, the company said Wednesday.
That follows reports that China is urging property developers and state-owned-enterprises to buy assets from Evergrande so it can avoid a massive default. A potential default would likely call into question the overall health of China's real estate market, which represents about a quarter of its overall economy.
Evergrande's debt has helped the company build more than 1,300 real estate projects in over 280 Chinese cities. The company employs 200,000 employees, and its massive construction projects indirectly creates more than 3.8 million jobs per year, its website said.
But after decades of growth, mostly in speculative real estate assets that have low occupancy rates and are sometimes are not even fully completed, the bill is coming due.
Despite the sizable week-long rally, Evergrande stock is still down more than 80% from its 52-week high.
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