China Strategic seeks to offload 1.4% stake in Evergrande vehicle unit
21/09/2021 15:29
* Stake would be worth around HK$388 mln at current share
price
* Move to sell comes as China Evergrande debt fears hit
markets
Sept 21 (Reuters) - Securities trading and money lending
company China Strategic Holdings Ltd 0235.HK said on Tuesday
it planned to sell up to a 1.37% stake in a unit of indebted
developer China Evergrande Group 3333.HK - and could do so at
a significant discount.
China Strategic said in a filing to the Hong Kong stock
exchange it would ask shareholders at an extraordinary general
meeting to allow directors to dispose of up to 133.6 million
shares in China Evergrande New Energy Vehicle Group. 0708.HK
The aspiring electric vehicle maker has a market
capitalisaion of HK$28.33 billion ($3.64 billion), according to
Refinitiv Eikon data. That indicates a current market value of
HK$388 million for a 1.37% stake.
To make any disposals more attractive, however, China
Strategic said it would be willing to sell at a 20% discount to
the five-day average closing price of Evergrande Vehicle shares.
For the five days prior to Tuesday, that works out at around
HK$2.76 ($0.35) per share, it added.
Evergrande Vehicle's shares are currently at HK$2.90.
The stock is down more than 90% so far this year as concerns
mount across global markets that its parent's $305 billion in
debt could trigger widespread losses in China's financial system
in the event of a collapse. urn:newsml:reuters.com:*:nL1N2QN02R
"The company acquired the Evergrande Vehicle shares for
investment purpose," China Strategic said in the filing.
"Having regard to the recent significant price fluctuations
of the Evergrande Vehicle Shares, the board decided to
restructure its investment portfolio and to solidify the
financial and cash position of the group," it added.
($1 = 7.7875 Hong Kong dollars)
(Reporting by Tom Daly
Editing by Peter Graff)
((tom.daly@thomsonreuters.com; +86 10 5669 2119;))