Evergrande’s sale of part stake breaks the ice

China’s real estate giant Evergrande had planned for about $2.6 billion to sell its majority stake in the famous property management company, but because “there is no consensus between shareholders and broken innings, for Evergrande in a debt crisis, is without a doubt, the deal was originally for constant to an urgent need money, to alleviate financial. China Evergrande Said late on 20 that it had planned to sell a 50.1 percent stake in its profitable Evergrande Property unit to a subsidiary of rival Hopson Chuangzhan Group Co LTD, an agreement that had been scheduled for Oct 12, but failed to complete the sale.

China Evergrande explained that it had been informed from a party other than the Securities and Futures Commission that the transferee hopson Did not meet the conditions prior to making a general offer for Evergrande Property, so the company exercised its right to rescind or terminate the agreement on October 13.

Evergrande is listed in Hong Kong, where securities regulations require buyers to make an offer to all shareholders to acquire 30 per cent or more of a company.

In a separate statement on Wednesday, Hopson said the seller failed to complete the sale of the shares to the buyer in accordance with the terms of an agreement reached between the company and the major shareholder of Evergrande Property.

Evergrande was forced to shelve the sale of a stake in its property services unit to Hopson chuang after failing to win approval from the Guangdong provincial government, sources told Reuters. Neither Evergrande nor the guangdong government responded.

Some of Evergrande’s international creditors also opposed the deal, the paper said. One of the creditors said they also opposed the deal. If the company sells assets before it collapses, creditors have less money to recover.

Shares in China Evergrande, its subsidiaries and Hopson chuangzhan have been suspended since October 4.

The collapse of the deal means evergrande’s debt crisis is likely to continue, but Chinese officials are confident about evergrande. Evergrande risks are an individual case, yi Gang, governor of the People’s Bank of China (PBOC), said in a speech at the 2021 G30 International Banking Seminar published on the bank’s website on Wednesday. “We are confident that evergrande risks can be controlled within a certain range to avoid systemic risks.”

Mainland Vice Premier Liu He said in a speech at the 2021 Financial Street Forum on Wednesday that individual problems have occurred in the property market, but risks are generally under control, reasonable capital needs are being met and the overall trend of the healthy development of the real estate market will not change.