Evergrande Could Be About To Sell A Property Management Unit To Raise Money

Cailian News, a Chinese state-run financial news channel, reported Monday that Hopson Development planned to take control of Evergrande’s property management arm by buying about a 51% stake in a deal that could be worth more than 40 billion Hong Kong dollars ($5.1 billion) .

Chinese state-run tabloid Global times also covered the expected deal, citing several “media reports” on the same day.

Shares of Evergrande’s Property Management Company and Hopson were also suspended from trading in Hong Kong on Monday. at a fair Submit, called Evergrande’s subsidiary “a potential general offer for the company’s stock,” while Hopson said in his own file: that an announcement was “pending” and would be related to a major acquisition.

In a In a separate statement to CNN Business, Hopson said it would “not comment on market rumours,” while reiterating it would make an “official announcement.” The project developer bills itself as one of the biggest in mainland China, and is based on in both Beijing and Guangzhou, according to the 2020 annual report. The company focuses on medium to high-end residential projects, according to its website for investors.

Evergrande did not immediately respond to a request for comment.

Evergrande is looking for buyers for some of its businesses as it struggles to survive a cash crunch. The conglomerate is the most indebted developer in China, with more than $300 billion in debt. It has has likely missed two bond payment terms in recent weeks, and the stock has crashed 80% so far this year.

Evergrande and his associates owned nearly 61% of Evergrande Property Services, the unit that Hopson would buy, from May, according to a stock exchange listing.

Analysts had expected a relatively quiet period of news this week as mainland China celebrates Golden Week, a major holiday. But markets are open in Hong Kong, where Evergrande’s shares and some of its bonds are traded.

Jeffrey Halley, a senior market analyst for Asia-Pacific at Oanda, said in a note to customers on Monday that “there is still very little visibility from the Chinese government about the fate of Evergrande, although a slow and steady dismantling of the company is the cause. seems to be.” favorite race at the moment.”

CNN’s Beijing office contributed to this report.