Evergrande’s 2.6bn unit stake sale fails as shares plunge 10.5% after trading resumes

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Evergrande’s 2.6bn unit stake sale fails as shares plunge 10.5% after trading resumes

On Wednesday, Evergrande, the grief-sickened Chinese real-estate developer whose businesses including asset management arms accounted for roughly a 2.0 per cent of entire Chinese GDP (Gross Domestic Product), had formally cancelled out a previous plan to sell about $2.6 billion worth of stakes in one of its money management units, as weaker real estate property firms around the globe had been bracing for a potential ripple effect of an imminent collapse of Evergrande.

Nonetheless, shortly after Evergrande had officially called off its plan to a stake sale which could have eased market jitters about the Chinese property developer that had botched to make repayments on its US Dollar-denominated bond coupons four times in less than three weeks and surpassed a 30-day grace period for one of its bond coupons with little signs of progress, officials from Beijing rushed to say that the pugnacious problem would not spiral out of control.

However, Hong Kong-listed shares’ prices of Evergrande, once China’s second-largest property developer which has now been crushed under a debt-pile of over $300 billion, had been plunged as much as 10.5 per cent after it resumed public market trading on Thursday morning.

Evergrande stake sale talks fail to bear fruits

In factuality, Evergrande had been in talks with its smaller local rival Hopson Development Holdings to sell a 50.1 per cent stake at its Property Services arm, nonetheless, in a stock exchange filing on Wednesday, the besieged property developer was quoted saying that the company had reasons to believe that “Hopson did not meet the prerequisite to make a general offer).

Aside from that, in a separate filing in Hong Kong stock exchange, Evergrande was quoted saying that it had abandoned talks of a potential sale of $1.5 billion worth of its stake with Chinese lender Shengjing Bank Co, heightening up investors’ jitters further.