Home Business Evergrande emptied Hengteng Network shares and estimated loss of HK$8.5 billion | Financial Crisis | China Evergrande | Hengteng Network Equity

Evergrande emptied Hengteng Network shares and estimated loss of HK$8.5 billion | Financial Crisis | China Evergrande | Hengteng Network Equity

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[Epoch Times November 18, 2021](Epoch Times reporter Xu Meng’er comprehensive report) China Evergrande Group, which is in debt crisis, emptied all shares of Hengteng Network on November 18 and cashed out 2.127 billion Hong Kong dollars. Evergrande estimates that the sale will lose approximately HK$8.5 billion.

On the morning of November 18th, China Evergrande and Hengteng Network simultaneously announced that all the approximately 1.662 billion shares of Hengteng held by China Evergrande had been sold to United Resources Investment Holdings Co., Ltd. at a price of 1.28 Hong Kong dollars per share, compared with 11. The closing price on the 17th was HK$1.94/share at a discount of approximately 24.26%, totaling HK$2.127 billion.

China Evergrande announced that, based on the difference between the sales shares and the book value of the consideration as of June 30, China Evergrande expects to incur a loss of approximately HK$8.5 billion from the transaction.

After the sale of shares, China Evergrande no longer holds shares in Hengteng Network.

According to documents from the Hong Kong Stock Exchange, China Evergrande sold Hengteng Network stocks on November 4 and 5, and realized a total of approximately HK$717 million.

The debt crisis of Evergrande Group has attracted the attention of the global financial market. Evergrande’s previous semi-annual report showed that as of June 31, Evergrande owed a total of 1.97 trillion yuan (about 300 billion US dollars) to suppliers, creditors and investors.

In early October, foreign investment JPMorgan Chase (JPMorgan Chase) issued a report stating that China Evergrande Group has a large amount of hidden debt, accounting for 55% of the actual total debt, and the net debt ratio is higher than 177%, which is greater than 100% of the statement.

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In order to maintain the liquidity of the group, Xu Jiayin, chairman of the board of directors of Evergrande, is selling personal assets to raise funds. On November 16, “China Business News” quoted sources familiar with the matter as saying that from July 1 to the present, in order to maintain the liquidity of the group, Xu Jiayin has raised funds through the sale of personal assets or pledged equity, and accumulated funds have been injected into the group. Over RMB 7 billion in cash.

On November 17, the Mainland Finance Association quoted a number of sources close to Evergrande saying that with the shrinking of funds and business, Evergrande Group has disbanded its “Fangchebao” (FCB) branches in multiple regions, especially In the online real estate and automobile market business departments, only some personnel are reserved for the aftermath.

The Financial Associated Press previously reported that the Evergrande Group will adjust its corporate structure based on the needs of strategic development. The headquarters will also cancel the regional management and supervision branch of the Group’s integrated management center. Its related businesses and personnel should be assigned to the regional company of the real estate group and plan to Complete the merger of the corresponding institutions and personnel adjustments before November 30.

Editor in charge: Lin Congwen


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