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Real estate group in crisis: Second largest owner of Evergrande plans to sell entire shares


The real estate company Evergrande is threatened with a world-wide bankruptcy. With Chinese Estates Holdings, a major shareholder wants to withdraw from the company, whose stock market price has surprisingly increased.

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Evergrande headquarters in Shenzhen: last agreement with creditors on interest payments

Photo: Ng Han Guan / AP

When it comes to Evergrande, Chinese Estates Holdings no longer thinks of profit, but of how big the loss will be.

The second largest shareholder in the troubled real estate company wants to sell its entire stake.

Chinese Estates Holding estimates that selling the entire stake could result in a loss of about $ 1.22 billion in 2021 alone.

The company said it has already sold $ 32 million worth of shares in Evergrande and plans to completely divest from the holding company.

The sale mandate is valid for twelve months from the date of a shareholders' meeting on September 23 to approve the sale, the company announced on the Hong Kong Stock Exchange.

The badly ailing Evergrande Group rose sharply on Thursday despite all the persistent fears of default and the announcement of Chinese Estates Holdings on the Hong Kong Stock Exchange.

The share price made a jump of over 30 percent at the start of trading, but reduced the increase by noon to a plus of around ten percent.

There is no information on offshore bonds

According to observers, investors reacted to an announcement from the previous day that the company could get some breathing space. Evergrande announced on Wednesday that the company had agreed with creditors to pay interest on a bond traded in Shenzhen, southern China, which matured on Thursday. The Hong Kong Stock Exchange was closed on Wednesday for a public holiday.

However, the fact that the company has still not provided any information on another offshore bond traded in dollars caused great uncertainty.

According to calculations by the financial service Bloomberg, Evergrande has to make an interest payment of $ 83.5 million on Thursday.

Another interest payment of $ 47.5 million is due on September 29th.

According to Bloomberg, there is a grace period of 30 days for both payments, which could give Evergrande more time.

The Chinese group has debts of the equivalent of more than 300 billion dollars.

Investors fear a default.

The corporation has to raise money to pay banks, suppliers and bondholders on time.

In addition, Evergrande owes retail investors, including many employees, billions of dollars.

The boss of Evergrande had encouraged employees in a letter on Tuesday.

CEO Xu Jiayin wrote that he was firmly convinced that the "darkest moment" could be overcome.

You will show yourself responsible towards home buyers, investors, partners and financial institutions.

apr / Reuters / dpa

Source: spiegel

All business articles on 2021-09-23

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