[NTD News September 24, 2021, Beijing time]Evergrande’s second largest shareholder, Huaren Property Group, plans to sell all Evergrande’s shares, which may result in a loss of nearly HK$10 billion. Hong Kong wealthy businessman Liu Luanxiong is a major shareholder of Chinese Real Estate. He has a close relationship with Xu Jiayin, the founder of Evergrande. In the face of Evergrande’s debt crisis, he had to jump ship.
“Chinese Land” intends to sell all Evergrande shares
The “Chinese Real Estate” Group announced on September 23 that it had recently sold about 0.82% of Evergrande’s shares, valued at HK$245.6 million, and obtained shareholder approval for the sale of the remaining 5.66% of Evergrande’s shares.
Hong Kong wealthy businessman Liu Luanxiong and his wife are the major shareholders of Chinese Real Estate. They have a close relationship with Evergrande founder Xu Jiayin. They helped Evergrande go public in Hong Kong and subscribed for Evergrande shares many times. They are also Evergrande’s second largest shareholder.
According to the announcement, in 2017 and 2018, Chinese Land spent US$1.75 billion to acquire the aforementioned equity in Evergrande and paid US$86 million to purchase China Evergrande’s bonds.
However, Evergrande is now in deep debt crisis and is on the verge of bankruptcy. Chinese Land plans to sell all of its 751 million shares of Evergrande, with a market value of approximately HK$1.7 billion, although this may cause a huge loss of HK$9.5 billion for the company.
In addition, Liu Luanxiong and his wife are also selling their personal shares in Evergrande. The transaction data disclosed by the Hong Kong Stock Exchange shows that on September 10, Liu Luanxiong and his wife reduced their holdings of China Evergrande by 24.436 million shares at an average price of 3.58 Hong Kong dollars per share, and their shareholding ratio fell from 8.96% to 7.96%.
Prior to this, on August 26, Liu Luanxiong and his wife reduced their holdings of 6.312 million shares at an average price of 4.48 Hong Kong dollars per share. A total of about 116 million Hong Kong dollars were cashed in these two reductions.
“Nihon Keizai Shimbun” reported that as of December 31 last year, Evergrande stocks and bonds held by Chinese Real Estate accounted for 35.8% of its total assets. Affected by Evergrande, the announcement of Chinese Land’s half-year results fell into a loss, with a book loss of HK$4.2 billion.
Evergrande bears more than 300 billion U.S. dollars in debt. Although Xu Jiayin has repeatedly called for the resumption of work and production and guarantees the delivery of buildings, more than 800 real estate projects of Evergrande in China are still in a state of suspension, and investors, builders, and home buyers have come to chase after them. Debts, claims.
Evergrande admitted for the first time on September 14 that it “has encountered unprecedented difficulties” and that if it fails to attract investors or sell assets on time, it may default. And said that no “substantial progress” has been made so far.
The Wall Street Journal quoted sources familiar with the matter on September 23 as saying that the Beijing authorities have issued instructions to local governments to prepare for the possible “storm” the collapse of Evergrande. The main task is to prevent social unrest.
According to the report, this shows that the Chinese Communist government is unwilling to save Evergrande and is preparing for the possible economic and social impact of Evergrande’s collapse.
In recent days, Evergrande’s allies have lost confidence and have reluctantly cut their flesh. In addition to Chinese Real Estate, Evergrande’s “loyal ally” China Strategic Group issued an announcement on the evening of September 21, suggesting that it seek shareholder approval in advance at an extraordinary general meeting to sell the group’s 133.6 million shares of Evergrande Motor at a discount.
Zhongce Group has invested in Evergrande Automobile since March 2015. As of June 30, the book value of China Strategic Group’s investment in Evergrande Auto was HK$3.861 billion, accounting for approximately 46.96% of the group’s total assets.
However, affected by Evergrande, China Strategic Group’s semi-annual report this year showed a net profit loss of HK$196 million, a year-on-year decrease of 480.68%. Among them, the market value of Evergrande Motor’s stock held by Zhongce Group decreased by HK$174 million.
Although Evergrande is entangled in debt, it does not affect Evergrande’s founder Xu Jiayin and other major shareholders. “Eye of the Storm” under Phoenix Finance disclosed on September 22 that, since 2009, Evergrande Group has accumulated a net profit of 173.388 billion yuan, but the company has distributed a large proportion of dividends every year, with a total dividend of nearly 70 billion yuan. Since 2011 alone, Xu Jiayin has cashed out 49.981 billion through dividends. But only a few hours later, the report was deleted by Sina Finance News.
Financial commentator Wang Jian said in the YouYube channel that Xu Jiayin regards Evergrande as a platform for making money, and the money is divided up. He did not regard Evergrande as his own company. Otherwise, how could Xu Jiayin’s wife Ding Yumei buy his own financial management? Products, make your own money. Therefore, Xu Jiayin and Ma Yun are different. Even if Evergrande falls, Xu Jiayin has already made the money.
Senior real estate executive Ms. Wang told Radio Free Asia that before the Evergrande crisis broke out, some of their executives may have secretly transferred their assets abroad. This is a common practice among China’s large real estate companies and even state-owned enterprises.
(Reporter Luo Tingting Comprehensive Report / Chief Editor: Wen Hui)
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