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Investing.com – Property developer China Evergrande Group’s (HK:3333) shares climbed on Monday, over the news that it would appoint an official from a unit of state asset manager China Cinda Asset Management Co. Ltd. (HK:1359) to its board.
The company’s Hong Kong shares jumped 7.26% to HK$1.92 ($0.25) by 11:43 PM ET (4:43 AM GMT), after surging more than 13% earlier in the session.
China Evergrande said on Sunday that it would appoint two new board members, the first of whom is non-executive director Liang Senlin, chairman of China Cinda (HK) Holdings Co. Ltd.
The second is Shawn Siu, chairman of China Evergrande New Energy Vehicle Group Limited. The company said in October 2021 that it would prioritize the growth of its nascent electric vehicle business over its core real estate operations.
The two appointments follow the setting up of a China Evergrande risk management committee in December 2021, whose members mostly comprise senior officials from state entities including China Cinda Asset Management.
Meanwhile, China Evergrande is still sitting on more than $300 billion in liabilities, including nearly $20 billion worth of international bonds that are all deemed to be in default after a run of missed payments in late 2021.
China Evergrande’s assets will likely be taken over by state-owned firms as part of a restructuring led by the Guangdong provincial government, and the appointment is a reassuring sign that restructuring is progressing.
Shares also got a boost from Friday’s report from REDD, which said the provincial government was aiming to release a framework debt restructuring plan for the company by March 2022. It also plans to separate the company’s offshore assets and sell them to pay off foreign debt, thus boosting foreign lenders’ hopes of recouping some of their funds, the report added.
