Setback in Evergrande’s attempt to recover liquidity. The Chinese real estate giant has communicated to the Hong Kong Stock Exchange the end of negotiations with Hopson Development Holdings for the sale of 50.1% of Evergrande Property Services Group, its real estate services division. The deal that has now ended would have guaranteed Evergrande a collection of 20 billion Hong Kong dollars (2.6 billion dollars).
Hopson Development Holdings also stated that it “regrets to announce that the seller has failed to complete the sale” of the stake in Evergrande Property Services.
Increase the pressure on Evergrande
The announcement puts new pressure on Evergrande to find other ways to raise money and meet its obligations with creditors. Bondholders, banks and other creditors are seeking repayments on more than $ 300 billion in liabilities from the world‘s most indebted real estate company.
Shares of China Evergrande, Hopson and Evergrande Property Services have been suspended since the beginning of the month pending the announcement of the agreement with Hopson. Shares of China Evergrande had fluctuated sharply from day to day prior to the suspension.
“No guarantee on financial obligations”
Evergrande shares will return to trading on the Hong Kong Stock Exchange on Thursday 21 October after the stop decided on 4 October. This was reported by the same real estate developer in crisis and one step away from default in a communication to the stock exchange, warning that “there is no guarantee that the group will be able to meet its financial obligations” in the face of a lack of liquidity.