China Evergrande to sell $ 1.5 billion stake in Shengjing Bank to state-owned company – .

China Evergrande to sell $ 1.5 billion stake in Shengjing Bank to state-owned company – .

Cranes stand at a construction site near the headquarters of the China Evergrande group in Shenzhen, Guangdong province, China, September 26, 2021. REUTERS / Aly Song

HONG KONG, Sept. 29 (Reuters) – Cash-strapped China Evergrande (3333.HK) group on Wednesday announced plans to sell a 9.99 billion yuan ($ 1.5 billion) stake in Shengjing Bank Co Ltd (2066.HK) to a state-owned asset management company as it scrambles to raise funds.

After missing a bond interest payment last week, Evergrande faces a big test on Wednesday with the deadline for another $ 47.5 million coupon payment that investors are watching closely. Read more

Evergrande has quickly become the biggest headache for Chinese companies, as it oscillates between a disorderly collapse with far-reaching impacts, a managed collapse, or the less likely prospect of a bailout by Beijing. Read more

The 1.75 billion shares, representing 19.93% of the issued share capital of the bank, will be sold for 5.70 yuan each to Shenyang Shengjing Finance Investment Group Co Ltd, a state-owned company involved in the management of capital and investment. ‘assets, China Evergrande said in a statement. deposit on the Hong Kong Stock Exchange.

Shenyang Shengjing’s stake in the bank will be increased to 20.79% after the agreement to become the bank’s largest shareholder.

“The company’s liquidity problem has negatively impacted Shengjing Bank significantly,” Evergrande Chairman Hui Ka Yan said in the statement.

“The introduction of the buyer, being a state-owned enterprise, will help stabilize the operations of Shengjing Bank and at the same time help to increase and maintain the value of the 14.75% stake in Shengjing Bank held. by the Society. “

Beijing is pushing public companies and state-backed real estate developers to buy some of the struggling China Evergrande group’s assets, people with knowledge of the matter told Reuters this week. Read more

Shengjing Bank demanded that all net proceeds from the divestiture be used to settle the group’s relevant financial debts owed to Shengjing Bank, Evergrande said.

Its stake in the bank would be reduced to 14.75% against 34.5%.

Reporting by Donny Kwok and Anne Marie Roantree; Editing by Kim Coghill and Stephen Coates

Our Standards: Thomson Reuters Trust Principles.


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