Home » People familiar with the matter: Evergrande suspends the sale of Evergrande property shares | Evergrande Group | Hopson Development | Yuexiu Real Estate

People familiar with the matter: Evergrande suspends the sale of Evergrande property shares | Evergrande Group | Hopson Development | Yuexiu Real Estate

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[Epoch Times October 20, 2021](Epoch Times reporter Li Bing comprehensive report) Recently, Evergrande Group has been striving to sell some of its assets to raise cash. However, after Chinese real estate developer Yuexiu Real Estate stopped acquiring the Hong Kong headquarters building of Evergrande Group, Guangdong real estate developer Hesheng Chuangzhan also suspended negotiations to acquire the equity of Evergrande Property.

On October 19, the Cailian Press quoted a source familiar with the matter that the negotiations between Yuexiu Property and Evergrande regarding the transaction have indeed been suspended. “The reason is more complicated, and there is a high probability that the shareholders of Evergrande Real Estate did not reach a consensus.” It is not yet known whether the subsequent two parties will restart negotiations.

Evergrande Group previously planned to sell 51% shares of Evergrande Property to Hopson Chuangzhan, and Hopson Chuangzhan gave Hengda Property a valuation of over 40 billion Hong Kong dollars. Hopson Development is one of the five largest real estate developers in Guangdong Province. Its main business is investment holding, property development, property investment and property management.

In addition, according to a report by Reuters on October 15, Chinese developer Yuexiu Real Estate has withdrawn from a US$1.7 billion acquisition of the Hong Kong headquarters of Evergrande Group due to concerns about Evergrande’s poor financial situation.

Two sources said that due to fears that Evergrande’s debt dilemma might complicate the successful completion of the transaction, the board of directors of Yuexiu Real Estate opposed the acquisition and the transaction was eventually stranded. Yuexiu Property is a large-scale real estate developer under the Yuexiu Group. It is a state-owned enterprise headquartered in Guangzhou.

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At the same time, National Electric Vehicle Sweden (NEVS), a subsidiary of Evergrande Group, is negotiating with venture capital companies and industry partners in the United States and Europe to find new owners.

Stefan Tilk, CEO of NEVS, said that its funds can be maintained for a while, adding that several investors have shown interest in buying the company.

It is worth mentioning that Evergrande Group has missed three rounds of interest payments on international bonds and has been striving to sell some of its assets to raise cash.

At present, the debt crisis of Evergrande Group has attracted the attention of the global financial market. The latest semi-annual report released by Evergrande shows that as of June 31, its total debt was 1.97 trillion yuan (about 305.7 billion US dollars). Roughly equivalent to 2% of China’s GDP.

In early October, JPMorgan Chase issued a report stating that Evergrande Group has a large number of hidden debts, 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.

Up to now, Evergrande has missed the debt repayment period three times in a row, which has further aggravated the market’s worries about the spread of debt defaults in China’s real estate industry.

Editor in charge: Sun Yun#

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