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China Evergrande raises US$273 million with exit from HengTen as creditors await payments on local and offshore debt

  • Embattled property developer faces more deadlines next week on overdue interest for domestic and offshore debt
  • Evergrande is seeking to avoid a collapse under more than US$300 billion of liabilities while founder Hui Ka-yan injects cash from own pocket

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The Evergrande Group headquarters is seen near other skyscrapers and construction sites in Shenzhen, southern Guangdong province on September 24, 2021. Photo: AP
Chad Bray
China Evergrande Group exited its stake in internet company HengTen Networks Group, raising a further HK$2.13 billion (US$273 million) as the embattled developer faces deadlines to pay overdue interest on its debt next week.
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Evergrande sold 1.66 billion shares of HengTen to Allied Resources Investment Holdings at HK$1.28 a share, representing a 24.3 per cent discount to its closing price on Wednesday, according to a Hong Kong stock exchange filing on Thursday.
The world’s most indebted developer, Evergrande held a majority stake in Hong Kong-based HengTen as recently as January, but had been selling down its holdings in recent months as part of an effort to manage 1.97 trillion yuan (US$308 billion) in total liabilities as it faces a cash crunch. The sale represented about 18 per cent of HengTen’s outstanding shares.

“Upon completion of the transaction, the company will cease to hold any shares in HengTen,” Evergrande said. The beneficial owner of Allied Resources is Li Shao Yu, it added.

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World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

World’s most indebted developer, China Evergrande Group, buys time to repay more creditors

HengTen’s shares soared as much as 28 per cent in Thursday’s morning session in Hong Kong, following the announcement. The shares had lost nearly 90 per cent of their value since hitting a 52-week high in February. Evergrande tumbled 2.5 per cent to HK$2.73.

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The HengTen group is principally engaged in film and television programmes production, distribution and online streaming platform business and other online services. It counts Tencent Holdings and its executive chairman Ke Liming among its other big shareholders.

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