China’s Evergrande to sell its shares in Internet unit HengTen for $ 418 million

0


A logo of the China Evergrande group is displayed during a press conference on the annual results of the real estate developer in Hong Kong, China on March 28, 2017. REUTERS / Bobby Yip / File Photo

HONG KONG, Aug 2 (Reuters) – China’s most indebted real estate developer Evergrande Group (3333.HK) has agreed to sell stakes in its Internet unit HengTen Networks Group Ltd (0136.HK) for a total of 3 , HK $ 25 billion ($ 418.2 million), a swap document showed on Sunday.

Evergrande shares were down more than 2% in early trading on Monday amid lingering concerns about its financial health, while HengTen jumped more than 30%. HengTen shares resumed trading on Monday after a suspension on Thursday.

Concerns about developer’s debt and the potential for systemic financial risk escalated after Evergrande said in June that its project companies failed to pay certain commercial papers on time, but said it was arranging the payment.

Fitch downgraded his credit rating on Wednesday, signaling his fear of a potential default. Read more

To ease the pressure, Evergrande will sell a 7% stake at HK $ 3.20 per share to a unit of Tencent Holdings Ltd. for HK $ 2.07 billion and a 4% stake in an unidentified buyer for HK $ 1.18 billion. The file did not give a date for the sale.

Prior to the transaction, Evergrande held a 37.55% stake in the company, while Tencent (0700.HK) held 16.9%. Evergrande’s stake will drop to 26.55% and Tencent’s holdings will rise to 23.9% after the sale, according to the filing. Evergrande has agreed to provide a 5-year HK $ 2.07 billion loan to HengTen to support its business development, the company added to the filing.

HengTen’s shares are expected to resume trading on August 2 after being halted on July 29, according to the filing.

($ 1 = 7.7720 Hong Kong dollars)

($ 1 = 7.7721 Hong Kong dollars)

Report by Marius Zaharia; Additional reports from Clare Jim; edited by Barbara Lewis and Sonali Paul

Our standards: Thomson Reuters Trust Principles.



Source link

Share.

Comments are closed.