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.
