(Adds background, shares, company spokeswoman)
HONG KONG, June 22 Shares in Evergrande Real
Estate (3333.HK) fell more than 4 percent early on Friday,
extending a sharp slide in the previous session, and China's
second-largest property developer by sales said it was
considering legal action against Citron Research, a short seller
which alleged it was insolvent.
Evergrande bonds shed 1.3 basis points on Friday, with its
2015 bonds opening at 90.1 cents on the dollar. They, too, were
hit hard on Thursday, with the 2015 bonds down 7 basis points.
According to Thomson Reuters data, Evergrande has outstanding
bonds of around $2.8 billion.
Around $1 billion was wiped off the company's value on
Thursday when its shares fell 11.4 percent after a report from
U.S.-based Citron Research accused Evergrande of financial
irregularity and bribery. [ID:nL3E8HL1UA]
In a Friday note, Barclays Capital said there was "still no
clarity on whether the (Citron) accusations are true or false,"
even after Evergrande hosted a conference call late on Thursday
to reassure investors.
Chairman Hui Ka Yan, who owns 63 percent of Evergrande, said
on the Thursday call that the company has 13 billion yuan ($2
billion) of cash on hand, sufficient to cover its operations.
"The other side's accusation is absurd, and we are very, very
angry," Hui told investors.
Evergrande denies Citron's accusations, and has said it
would not revise its forecast for annual sales of 80 billion
yuan. The company said it is organizing a team of lawyers to
defend itself against the accusations.
A spokeswoman for Evergrande said the company will issue a
formal response to Citron's report via later on Friday.
By 0220 GMT, Evergrande shares were trading down 1.8 percent
at HK$3.91. Hong Kong's properties and construction index
.HSCIPC was down 0.3 percent.
($1 = 6.3642 Chinese yuan)
(Reporting by Alex Frew McMillan; additional reporing by
Jonathan Rogers; Editing by Ian Geoghegan)
((email@example.com)(+852 2843 6313)(Reuters
Keywords: CHINA EVERGRANDE/SHARES
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