property
Partial sale of Evergrande service division failed
Evergrande is considered the world’s most heavily indebted real estate company. Photo: Katherine Cheng / SOPA / ZUMA / dpa
© dpa-infocom GmbH
For the deeply in crisis Chinese real estate giant Evergrande, a majority sale of the property management business could have brought billions into the cash register. But nothing will come of it.
The heavily indebted Chinese real estate company Evergrande has given up the multi-billion dollar partial sale of its service division.
A majority sale of the property management business could have flushed billions into the ailing real estate giant’s cash register in the short term. China Evergrande announced on Wednesday that the process of selling a majority stake in the property management company Evergrande Property Services to the Hooplife Technology Group, a subsidiary of the investment holding Hopson Development, has been stopped.
Based on information from various sources, one has reason to believe that the buyer did not meet the requirements for the submission of a general offer for shares in Evergrande Property Services, said Evergrande’s announcement to the stock exchange. Hopson stressed in a statement that the company was ready to complete the transaction. However, Evergrande informed it of the cancellation of the transaction on October 13th.
According to Chinese media reports, Hopson Development wanted to take over 51 percent of the building management arm. The total value of Evergrande Property Services was given as more than 40 billion Hong Kong dollars (the equivalent of 4.4 billion euros). Hopson’s shares, like Evergrande Group and Evergrande Property Services, were suspended from trading on October 4th.
China Evergrande has now applied that its shares may be bought and sold again on the Hong Kong stock exchange from October 21, the company said. The group will continue to implement the measures to alleviate the liquidity problems.
It was the first time in the company’s more than $ 300 billion indebted company that trading in its shares was suspended. Evergrande is considered the world’s most heavily indebted real estate company. There is an urgent need to raise funds in order to be able to pay banks, suppliers and bondholders on time. The company is so large that some experts fear a “risk of contagion” for China’s economy and beyond.