Stock Groups

Key Evergrande deal to sell stake in unit put on hold

by Mike Robinson

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© Reuters. FILE PHOTO – The China Evergrande Centre can be seen in Hong Kong (China). August 25, 2021. REUTERS/Tyrone Siu/File Photograph

HONG KONG (Reuters – China Evergrande Group has put off selling a 51% interest in its property services division, two people familiar with the matter stated. The move is a blow for Evergrande Group, who was trying to prevent a disruptive default.

Sources previously revealed to Reuters that Evergrande was on the verge of bankruptcy with over $300 billion in outstanding debt and was currently in negotiations to sell its stake in Evergrande Property Services for HK$20billion ($2.6 billion).

The deal was put on hold because it still needs to get blessings from Guangdong province government. This is responsible for Evergrande’s restructuring.

The reason why the province government did not approve the transaction is not clear. According to the source, Evergrande has some offshore creditors that also oppose the deal.

Hopson’s representative asked Reuters for an announcement when Hopson was contacted. Evergrande, Guangdong’s provincial government didn’t immediately reply to Reuters inquiries for comment.

Because they weren’t authorized to talk to media, the sources refused to identify themselves.

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