Home » Evergrande flies to the stock market after selling assets for 1.5 billion dollars

Evergrande flies to the stock market after selling assets for 1.5 billion dollars

by admin

(Il Sole 24 Ore Radiocor) – The Chinese real estate giant Evergrande, at risk of default due to the huge amount of accumulated debt, raises funds by selling assets for about 1.5 billion dollars, which is causing the company’s stock to fly to the Hong Kong Stock Exchange, with a gain also reached 12 points. In particular, as stated in the documentation delivered to the Hong Kong Stock Exchange, the Board of Evergrande has decided to sell a 19.93% stake (approximately 1.753 billion shares) in the regional bank Shengjing Bank for 5.70 yuan each, for a total of about 9.99 billion yuan (about 1.5 billion dollars). Therefore, the fact that Fitch has cut the valuation from “CC” to “C”, a step above the default level, does not weigh on the stock.

The buyer will be Shenyang Shengjing Finance Investment Group, which will pay the sum once the conditions set out in the agreement are met (approval by the Board of Shengjing Bank and obtaining the green light from the regulatory authorities). After the sale of the share, Evergrande will still hold 14.57% stake in the bank. “The company’s liquidity problem has had a negative and material impact on Shengjing Bank. The arrival of a buyer, which is a state-controlled company, will help stabilize Shengjing Bank’s operations and at the same time help increase and maintain the value of Evergrande’s 14.75% stake in the bank “, reads in the documentation, underlining that “the cooperation of Shengjing Bank is required to complete the sale, which requires that all net proceeds of the sale be used to settle the significant financial liabilities of the group towards Shengjing Bank”.

See also  This is how the EU regulates the purchase of bonds by private investors

Loading…

Investors therefore look more to financial news than to downgrade Fitch, with a recovery rating “RR6”, citing the probability that the group has not met the initial deadline for the payment of interest on a dollar bond. The review of the valuation also concerns the subsidiaries Hengda Real Estate Groupe Tianji Holding Limited. “The downgrades reflect the fact that Evergrande has probably missed interest payments on senior securities unsecured and is believed to have entered the resulting 30-day grace period before non-payment constitutes an event of default, ”Fitch points out. The rating agency reports that no official announcements have been made on the payment of the coupon maturing on September 23 for Evergrande’s 8.25% bond for $ 2.025 million.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy