Shares of Hong Kong-listed property developer Emperor International Holdings Ltd recorded their steepest drop of the year on Monday following the company’s disclosure of overdue bank loans and ongoing discussions with lenders over a debt restructuring plan.
In a stock exchange filing published late Friday, the group reported that as of 31 March, it had over HK$16.6 billion (approximately RM8.92 billion) in bank borrowings that were overdue or in breach of loan covenants. The company warned that, as a result, lenders may demand immediate repayment.
The announcement triggered a sharp market reaction, with Emperor International’s shares falling as much as 16 percent in early trading on Monday, marking the largest intraday decline since August 2024. The stock later recouped some losses, trading at HK$0.21 per share.
Emperor’s situation reflects wider pressures on Hong Kong’s real estate sector, which has been significantly impacted by the prolonged property downturn in mainland China. The crisis has affected developers of all sizes, from major players such as New World Development Co to smaller firms like Emperor International. Property values in Hong Kong have declined by approximately 30 percent over the past four years, reaching levels last seen nearly a decade ago. Concurrently, banks have become increasingly cautious with credit issuance.
Adding to investor concerns, Emperor International also reported a net loss of HK$4.7 billion for the financial year ended 31 March, a deterioration from previous results.
Bloomberg Intelligence analysts Patrick Wong and Francis Chan commented in a note on Monday that financially strained Hong Kong developers may pose growing risks to the banking sector if they fail to secure urgent liquidity or negotiate debt relief. They warned that further declines in property prices could compel banks to take write-downs on distressed loans, should delinquencies mount.
-Bloomberg
