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Evergrande to Sell Entire Stake in HengTen for $273 Million -Breaking

by Mike Robinson

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© Bloomberg. On Friday, July 23rd, 2021, the China Evergrande Centre was opened in Wan Chai, Hong Kong. HSBC Holdings Plc and Bank of China Ltd.’s Hong Kong unit are reconsidering their decisions to halt mortgages for China Evergrande Group’s unfinished residential properties in Hong Kong, after the city’s de facto central bank questioned the moves, according to people familiar with the matter.

(Bloomberg). China Evergrande Group will sell its remaining stake in HengTen Networks Group Ltd. to raise HK$2.13billion ($273m), this is the most recent asset sale by the property-stricken giant.

According to a Hong Kong stock trade filing, the developer has agreed to sell his 18% stake in the internet services company to Allied Resources Investment Holdings Ltd. (Hong Kong) at HK$1.28 per share. That’s a discount of about 24% to the last close on Wednesday.

Evergrande stated that it anticipates a loss in excess of HK$8.5billion from the sale. This is as Evergrande tries to raise funds and pay off more than $300bn in debt. China’s developers are currently in the midst of a severe debt crisis. They face a tightening leverage, as well as a slump in sales. 

It stated that Evergrande would use the profits of the sale to fund general working capital. Li Shao Yu is the owner of Allied Resources. 

Evergrande shares have fallen 81%, and HengTen Networks’ shares dropped 36%.

Evergrande acquired the Hong Kong-listed firm with Tencent Holdings Ltd. in 2015. It renamed it HengTen, an online company focusing on film. Evergrande had a 55.6% interest in HengTen in October 2020. But, the company has been selling off its shares in recent months. 

Bloomberg calculations reveal that Evergrande had sold a combination of 530,000,000 shares in HengTen on the open markets earlier this month. The transaction was valued at HK$1.12 Billion. Ke Liming, the owner of HengTen’s subsidiary Pumpkin Films Limited, purchased a part of Evergrande’s stake. By selling another stake, the firm raised $418million in August. 

Updates starting at the fifth paragraph.

©2021 Bloomberg L.P.

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