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Chinese real estate giant, Evergrande shares rebounds at the just concluded Hong Kong stock market opening on Tuesday

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Chinese real estate giant, Evergrande shares recovers at the Hong Kong stock market opening after a historic drop.

During the announcement on Tuesday at the opening of the market after the conglomerate last night announced the creation of a risk control group to mitigate and eliminate future risks.

The group’s shares saw a rise in the value of 4.97%.

However, Evergrande is still far from recovering from the hit it suffered on Monday in the stock market when its shares fell 19.6% to their all-time low after the group acknowledged on Friday the possibility of incurring in the official default of its debts after weeks of dodging them on the hood and announcing that he will negotiate a restructuring plan with his ‘offshore’ creditors.

The risk control group will be attended by the founder and president of the company, Xu Jiayin, legal advisers and representatives of state-owned companies.

Authorities in the southeastern province of Guangzhou, where the group is based, announced that they would assign a “task force” to Evergrande to “resolve its risks” shortly after the company revealed, in the same statement on Friday, that it had received a lawsuit to pay 230 million euros ($ 260 million) in collateral at a time when “there is no guarantee” that it has sufficient funds to meet its financial obligations.

On Monday, Evergrande was facing the expiration of a 30-day grace period to pay interest on two offshore bonds.

Although it has not yet made any announcement in this regard, Evergrande’s breach of any of its obligations could trigger cross-insolvency, a situation in which it is enough for a debtor to go into default with a single creditor for other creditors to be able to claim your loan back.

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