Evergrande Sells More Assets, Shares Halted in Hong Kong

China Evergrande Group is selling a $5.1 billion interest in its Evergrande Property Services Group to the 13th largest property developer in China.

article-image

Blockworks exclusive art by axel rangel

share

key takeaways

  • Evergrande is making a “major transaction” in a move to manage its debt burden
  • With liabilities of $300 billion, and a raft of illiquid assets, markets fear collateral damage

Shares of China Evergrande Group were halted in Hong Kong trading on Monday, according to an announcement from the company, pending details of a “major transaction”. The reference is to a sale of a majority stake in its property management business, Evergrande Property Services Group, for more than $5 billion, according to Reuters.

The news ups the pace of Evergrande’s asset sales following last week’s divestment of a 20% stake in Shengjing Bank, raising $1.5 billion. Chinese media reported Monday that Hopson Development, another Chinese property developer, was the buyer of a 51% stake in the Evergrande property management business. Trading of Hopson and Evergrand Property Services Group shares were also both suspended in Hong Kong.

China’s central government is involved in the unwinding of the real estate giant, as Evergrande faces potential default on several bond interest payments later this month.

The former chairman of Hopson is Chu Mang Yee, a billionaire former government official who, Bloomberg reports, is known in Chinese media circles as an “invisible magnate” due to his relatively low-profile. His daughter Chu Kut Yung is the current Hopson chair, and the family has a net worth north of $6 billion.

Bloomberg, citing “people familiar with the matter”, notes that dollar-denominated bonds due today, totaling $260 million and issued by a joint venture of Evergrande’s Hengda Real Estate subsidiary, are guaranteed by Evergrande. If left unpaid, Evergrande would be in default. Unlike the interest payments the company missed last week, there is no 30-day grace period.

The National Day Golden Week string of holidays are currently being observed in China from October 1 to October 7.

European markets are down roughly -0.1%, and US markets are set to open lower in New York, with S&P 500 and Nasdaq futures trading between -0.35% and -0.5% just over an hour before the open.

Bitcoin has been ranging since a strong move up on Friday, between about $47,100 and $48,800, down about 1.3% in the past 24 hours.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

As part of its 19b-4, the potential issuer included a correlation analysis of ETH that’s “substantially similar” to the BTC analysis done by the SEC before it approved the spot bitcoin ETFs

article-image

A greater focus on data availability sampling is top of mind, including additional work that layer-2s must do to become faster and more secure

article-image

The former FTX CEO was sentenced in a New York courtroom on Thursday

article-image

👨‍⚖️ SBF’s courtroom sequel: Plus, Coinbase’s legal loss was DeFi’s gain

article-image

Public mining companies have been acquiring sites, refreshing machine fleets and diversifying business models in preparation for the event