Evergrande to raise $5 billion from property unit sale

HONG KONG: China’s Evergrande will sell a majority stake in its property management business for more than $5 billion, Arab News quoted Chinese media, as saying, a deal which would be the largest asset sale yet at the debt-laden property developer if it goes ahead.

Once China’s top-selling property group, Evergrande is facing what could be one of the country’s largest-ever restructuring, as the company is weighed down by debts of around $305 billion.

Uncertainty over Evergrande’s fate has unsettled financial markets worried about any fallout from its troubles.

Evergrande said it requested a halt in the trading of its shares in Hong Kong pending an announcement about a major transaction. Evergrande Property Services Group, a spin-off listed last year, also requested a halt and said it referred to “a possible general offer for shares of the company”.

China’s state-backed Global Times said Hopson Development was the buyer of a 51 per cent stake in the property business for more than HK$40 billion ($5.1 billion), citing unspecified other media reports.

Hopson also said it had suspended trading in its shares, pending an announcement related to a major acquisition of a Hong Kong-listed firm and a possible mandatory offer.

Neither Hopson nor Evergrande responded to the requests for comment on the Global Times report.

Analysts said the possible deal signals the company is still working to meet its obligations. But it also rekindled broader concerns about the risk to China’s property sector and economy if Evergrande is liquidated at low prices.