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After the debt turmoil of China Evergrande Group spread for several months, progress was reported in the split of its assets.
On the morning of Monday, October 4, the Hong Kong stock market opened and China Evergrande and Evergrande Properties suspended trading, but the reason was not disclosed.
The Cailian Press quoted people familiar with the matter as reporting that Guangzhou real estate developer Hesheng Chuangzhan intends to acquire about 51% of the shares of Evergrande Property and obtain a controlling stake in Evergrande Property. The transaction amount is estimated to exceed HK$40 billion.
According to a report by China Business News, there is widespread speculation in the market that Hopson Development will acquire a 51% stake in Evergrande Property and has obtained special approval from the Hong Kong Stock Exchange.
At the same time, Hopson Development Group also issued an announcement on the Hong Kong Stock Exchange that the company agreed to acquire shares in a Hong Kong listed company and the company was temporarily suspended from trading.
It is understood that since Evergrande Property has been listed on the Hong Kong stock market for less than a year, this transaction has to obtain special approval from the Hong Kong Stock Exchange. In response to this, Hopson Development said, “Everything is subject to the announcement.”
China Evergrande’s announcement pointed out that the company’s shares were temporarily suspended for trading in order to wait for the “publication of a major transaction announcement containing inside information”. When Evergrande broke out in the debt crisis in August this year, it planned to sell part of its Evergrande Property and Evergrande Auto shares, but none of the transactions were concluded.
Hopson Development was established in 1992 and listed on the Hong Kong Stock Exchange in 1998. Country Garden, Evergrande, R&F, and Agile are listed as the top five real estate developers in Guangdong Province, and are known as the “Five Tigers in South China” to develop mid-to-high-end large-scale housing Mainly real estate properties.
Hopson Chuangzhan became the first mainland company with annual sales exceeding RMB 10 billion in 2004, and was once called the “real estate aircraft carrier” by Wang Shi, the founder of Vanke. Since then, following the Hong Kong-funded real estate companies’ business model of “high premium, more land, and slow turnover”, the ranking has gradually fallen behind.
However, in the past two years, Hopson Chuangzhan has shown signs of renewed efforts. In the first half of 2021, Hopson Chuangzhan achieved sales of RMB 21.23 billion, an increase of 63% year-on-year, which is much higher than the average level of its peers.
After the outbreak of the debt crisis, China Evergrande in August inquired about selling part of its shares in Evergrande Property and Evergrande Auto. Another real estate giant Country Garden was once rumored to be a potential buyer, but it broke.
According to a report by Beijing Anbang Think Tank, Evergrande’s liabilities involve more than 128 banks and 121 non-banking institutions. Thousands of development projects affect 3.8 million jobs in mainland China, millions of home buyers and the interests of the industrial chain. The bankruptcy will severely damage mainland finance. Stable; Evergrande’s financial report showed that as of the end of June, the total debt was RMB 1.9 trillion, the highest among listed real estate companies in the world.
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