to sell stake in bank, faces bond payment

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Residences at China Evergrande Group’s Life in Venice real estate and tourism development in Qidong, Jiangsu province, China, on Tuesday, Sept. 21, 2021.

Qilai Shen | Bloomberg | Getty Images

Ahead of another interest payment deadline, Chinese developer Evergrande announced it will be selling off a $1.5 billion (9.99 billion yuan) stake in Shengjing Bank to a state-owned asset management firm.

The property giant, which is buckling under the weight of more than $300 billion in debt, has been struggling to raise funds as it faces a $47.5 million bond interest payment deadline on Wednesday. The embattled real estate giant owes payments to banks and suppliers.

In a filing to the Hong Kong exchange on Wednesday morning, Evergrande said that it has entered an agreement to sell the 1.75 billion shares it owns in Shengjing Bank to the Shenyang Shengjing Finance Investment Group, at 5.70 yuan per share. Those shares amount to 19.93% of the issued share capital of the bank.

Evergrande had earlier already disposed of 1 billion yuan worth of shares in Shengjing Bank.

In the statement, Evergrande said that its liquidity problems have already “adversely affected” Shengjing Bank “in a material way.” Introducing the purchaser – the state-owned Shenyang Shengjing Finance Investment Group – will “stabilise the operations” of the bank, Evergrande said.

Evergrande’s shares in Hong Kong jumped nearly 10% in early trading on Wednesday morning.

Another bond interest payment due Wednesday



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