What’s new: Debt-ridden real estate developer Tahoe Group Co. Ltd. said its stock faces delisting from the Shenzhen Stock Exchange as the shares traded below 1 yuan ($0.14) for 13 consecutive days and aren’t likely to return to the 1 yuan threshold before a 20-day limit.
Stocks are automatically delisted if they trade for less than 1 yuan for 20 straight days or if their market value falls below 300 million yuan for a similar period, according to the Shenzhen bourse’s listing rules.
Tahoe Group shares closed Wednesday at 0.61 of a yuan. The stock was tagged with special treatment risk since May 2022 after it reported net losses for three consecutive years, indicating a risk of delisting. Stocks with a special treatment tag are subject to a trading fluctuation limit of 5%. Even if the shares rise 5% every day now, the closing price on the 20th day will still miss the 1 yuan requirement.
The background: Fujian-based luxury villa developer Tahoe has been struggling with a debt crisis since 2019 and defaulted on billions of dollars of bonds. The company said in its latest announcement that it had over 58 million yuan of overdue loans as of April 28, and it’s trying to push forward a debt restructuring.
Last year, Tahoe Chairman Huang Qisen was absent from work for eight months while assisting authorities in an investigation, Caixin learned from people familiar with the matter.
While it was unclear which agency was involved, sources said the investigation was related to China Construction Bank Corp. (CCB), one of the largest state-owned commercial banks.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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