Evergrande's second-biggest shareholder plans to sell entire stake (updated)

Chinese Estates Holdings

23/09/2021 03:38

(Adds Chinese Estates comment, stock moves)
    HONG KONG, Sept 23 (Reuters) - Chinese Estates Holdings
 0127.HK , the second-biggest shareholder of embattled developer
China Evergrande  3333.HK , said on Thursday it has sold $32
million worth of its Evergrande stake and plans to exit the
holding completely.
    "The directors are cautious and concerned about the recent
development of China Evergrande Group including certain
disclosure made by China Evergrande Group on its liquidity,"
Chinese Estates said in a filing to the Hong Kong stock
exchange.
    With $305 billion in liabilities, Evergrande is struggling
to meet its debt obligations and investors worry that the rot
could spread to creditors including banks in China and abroad.
    Shares of Chinese Estates jumped as much as 15.1% in early
trading to HK$2.51, notching the biggest daily percentage gain
since June 2020.
    China Evergrande stock soared as much as 32% in the biggest
daily percentage rise since listing in November 2009, after its
unit said on Wednesday it had "resolved" a coupon payment on an
onshore bond.  urn:newsml:reuters.com:*:nL1N2QO1IT
    Chinese Estates, which owned about 6.50% of Evergrande's
equity capital as of Sept. 10 according to Refinitiv Eikon data,
 said it has mandated a sale of all or part of the remaining
5.66% Evergrande stake either on the market or through block
trades.
    The disposal mandate will be valid for 12 months from the
date of a shareholders' meeting on Sept. 23 to approve the sale,
it said. 
    Chinese Estates said it had already sold 108.91 million
shares, or 0.82%, of Evergrande's issued share capital between
Aug. 30 and Sept. 21 for HK$246.5 million ($32 million).
    The company estimated that if the entire stake is sold, it
will realise a loss of about HK$9,486.3 million ($1.22 billion)
for the year ending in December 2021.
    Proceeds from the disposals will be used for general working
capital and for reinvestment when opportunities arise, it added.
($1 = 7.7860 Hong Kong dollars)

 (Reporting by Donny Kwok; Editing by Anne Marie Roantree and
Muralikumar Anantharaman)
 ((donny.kwok@thomsonreuters.com; +852 2843 6470;))