China Evergrande to sell $1.5 bln stake in Shengjing Bank to state firm

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Cranes stand at a building web site close to the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Track

  • Shengjing calls for reimbursement of money owed resulting from it
  • Evergrande says sale will assist stabilise Shengjing
  • Evergrande faces bond fee deadline Wednesday

HONG KONG, Sept 29 (Reuters) – Money-strapped China Evergrande mentioned on Wednesday it plans to promote a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Financial institution Co Ltd to a state-owned asset administration firm because it scrambles to boost funds.

Shengjing Financial institution had demanded that every one web proceeds from the disposal be utilized to settle the related monetary liabilities of the group resulting from Shengjing Financial institution, Evergrande mentioned.

That requirement means that Evergrande, which missed a bond curiosity fee final week, will likely be unable to make use of the funds for different functions akin to one other curiosity fee to offshore bondholders of $47.5 million due on Wednesday.

The is being carefully watched by buyers because the developer’s subsequent huge take a look at in public markets.

Evergrande has quickly develop into China’s largest company headache because it teeters between a messy meltdown with , a managed collapse or the much less seemingly prospect of a bailout by Beijing.

The 1.75 billion shares, representing 19.93% of the issued share capital of the financial institution, will likely be offered for five.70 yuan apiece to Shenyang Shengjing Finance Funding Group Co Ltd, a state-owned enterprise concerned in capital and asset administration, China Evergrande mentioned in a submitting to the Hong Kong bourse.

Shenyang Shengjing’s stake within the financial institution will likely be elevated to twenty.79% after the deal to develop into the financial institution’s largest shareholder.

“The corporate’s liquidity difficulty has adversely affected Shengjing Financial institution in a cloth method,” Evergrande Chairman Hui Ka Yan mentioned within the assertion.

“The introduction of the purchaser, being a state-owned enterprise, will assist stabilise the operations of Shengjing Financial institution and on the identical time, assist improve and keep the worth of the 14.75% curiosity in Shengjing Financial institution retained by the corporate.”

government-owned corporations and state-backed property builders to buy a few of embattled China Evergrande Group’s belongings, individuals with data of the matter instructed Reuters this week.

Its stake within the financial institution could be diminished to 14.75% from 34.5%.

Reporting by Donny Kwok and Anne Marie Roantree; Enhancing by Stephen Coates


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