November 18, 2021

Evergrande Sells All The Company's Shares!

 Debt, debt, debt around the waist.

Evergrande Group has sold its entire stake to streaming services firm HengTen Network Group for HK $ 2.13 billion or US $ 273.5 million in an effort to avoid ‘default’ status due to debt.

Evergrande, a heavily indebted Chinese real estate company, has posted a loss of HK $ 8.5 billion on the sale of its 18% stake to HengTen, in which Chinese gaming and social media giant Tencent Holdings also holds about 20% of the stake.

Earlier, Evergrande had several times passed the payment deadline in recent weeks, as it also struggled with debt of more than $ 300 billion, of which $ 19 billion was international market bonds.

Evergrande’s wholly -owned unit has entered into an agreement with Allied Resources Investment Holdings Ltd owned by investor Li Shao Yu to sell 1.66 billion shares of HengTen at HK $ 1.28 per share at a 24% discount at Wednesday’s closing price.

The latest share disposal by Evergrande extended the sale of HengTen shares to 26.55% in the secondary market since the beginning of this month.

Shares of Evergrande were down 5% during interim afternoon trading while HengTen which is described as Netflix China by Chinese media jumped 23%.

Last week, Evergrande once again avoided default with last -minute bond payments, but the delay did little to ease the pressure on the mainland nation's real estate sector from liquidity problems.

Evergrande has a new coupon payment totaling over $ 255 million to be paid on December 28th.

Meanwhile, Chinese authorities urged Evergrande Chairman Hui Ka Yan, 63, to use part of his personal wealth to help pay bondholders.