A major shareholder in Evergrande Group is planning to sell all of its shares in the Chinese developer, potentially taking in more than $1 billion in the process.
Chinese Estates Holdings, which is owned by Hong Kong billionaire Joseph Lau and his wife Chan Hui Wan, said Thursday it had recently reduced its stake in Evergrande from 6.5% to 5.7% and was seeking shareholder approval to sell the rest. .
Chinese real estate spent the equivalent of $1.75 billion to purchase its stake in 2017 and 2018, and another $86 million in Evergrande bonds, according to the documents.
Now, the company said its board of directors has been cautious about the company, including its liquidity issues and risks to its finances and operations if it fails to resolve the issues.
Chinese real estate also noted a significant drop in Evergrande’s share price, as well as stock market volatility and changes in markets and the economy.
Shares of Evergrande rose about 18% Thursday after it settled bonus payments in China itself on Wednesday, but the stake is still up over 82% this year.
Investors are considering whether the company can pay out $83.5 million in coupons due Thursday, in dollar-denominated bonds.
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