© Reuters. FILE PHOTO: Cranes stand at a development website close to the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Track
HONG KONG (Reuters) -Money-strapped China Evergrande Group stated on Wednesday it plans to promote a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Financial institution Co Ltd to a state-owned asset administration firm because it scrambles to boost funds.
After lacking a bond curiosity cost final week, Evergrande faces a giant check on Wednesday with the deadline of one other coupon cost of $47.5 million that traders are watching carefully.
Evergrande has quickly develop into China’s greatest company headache because it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the much less probably prospect of a bailout by Beijing.
The 1.75 billion shares, representing 19.93% of the issued share capital of the financial institution, will likely be offered for five.70 yuan apiece to Shenyang Shengjing Finance Funding Group Co Ltd, a state-owned enterprise concerned in capital and asset administration, China Evergrande stated in a submitting to the Hong Kong bourse.
Shenyang Shengjing’s stake within the financial institution will likely be elevated to twenty.79% after the deal to develop into the financial institution’s largest shareholder.
“The corporate’s liquidity concern has adversely affected Shengjing Financial institution in a cloth method,” Evergrande Chairman Hui Ka Yan stated within the assertion.
“The introduction of the purchaser, being a state-owned enterprise, will assist stabilise the operations of Shengjing Financial institution and on the identical time, assist enhance and preserve the worth of the 14.75% curiosity in Shengjing Financial institution retained by the corporate.”
Beijing is prodding government-owned companies and state-backed property builders to buy a few of embattled China Evergrande Group’s belongings, individuals with data of the matter instructed Reuters this week.
Shengjing Financial institution demanded that every one web proceeds from the disposal be utilized to settle the related monetary liabilities of the group on account of Shengjing Financial institution, Evergrande stated.
Its stake within the financial institution can be lowered to 14.75% from 34.5%.
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