Why Evergrande suspended its shares

Chinese real-estate behemoth Evergrande, which has been in the eye of a liquidity storm in recent weeks, halted share trading at 9am Hong Hong time today (Oct. 4) as investors awaited confirmation of a rumored takeover of the company’s property management business.

The company, which is on the brink of collapse, announced the suspension “pending the release by the company of an announcement containing inside information about a major transaction,” it said in a filing with the Hong Kong stock exchange.

Chinese state newspaper Global Times reported that a rival property company, Hopson Development, plans to purchase a 51% stake in Evergrande’s property services unit for more than $5 billion. Trading in Hopson was also paused pending an announcement about a “major transaction,” in which the company has “agreed to acquire the shares of a company…listed on the Stock Exchange.”

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