Evergrande Sells Stake in Internet Unit for $570 Million


China Evergrande Group sold stakes in its internet unit for $570 million to ease funding pressure, according to an exchange filing late Monday.
The developer sold 738.8 million shares of Hong Kong-listed HengTen Networks Group Ltd. at HK$6 apiece off exchange on Sunday, a filing showed. Ke Liming, owner of Pumpkin Films Ltd., bought the shares, a separate filing showed. Pumpkin Films was acquired by HengTen in October. Local media including the Oriental Daily reported the news earlier.
Evergrande has resorted to offloading assets and spinoffs, as it tries to meet so-called “Three Red Line” requirements that curb developer debt ratio. On Monday, the country’s most indebted developer said it would sell shares in a Hangzhou unit to a company controlled by a repeated investor in Evergrande’s affiliates. Evergrande’s founder Hui Ka Yan has repeatedly tapped deep-pocketed friends and supporters to raise funding to fend off its liquidity crisis.
Ke’s holdings in HengTen will increase to about 40.4% from 32.36% after the transaction, according to the filing.
Several large Chinese banks have decided in recent months not to renew loans to the company when they mature this year, Bloomberg reported earlier Tuesday.
Evergrande might need to dispose of more assets to raise funds, Bloomberg Intelligence analysts led by Daniel Fan wrote in a note. Key major assets that could be monetized include Evergrande’s tourism property, new electric vehicle, property services and the Fangchebao online sales platform, said Fan, adding that they could be worth more than 700 billion yuan ($108 billion).
HengTen shares closed 9% lower in Hong Kong on Tuesday, down 63% from its February peak this year. Evergrande nudged 0.7% higher to close at HK$10.9.
Source: Bloomberg

- Video Advertisement -


Please enter your comment!
Please enter your name here