Hopson Development plans to acquire 51% of Evergrande’s property management unit
Published: Oct 04, 2021 11:43 AM
Evergrande Group Photo: CFP

Evergrande Group Photo: CFP

Property developer Hopson Development Holding Co is reportedly to acquire about 51 percent of the indebted Evergrande group's property management unit, and the deal could be valued at more than 40 billion HKD ($5.14 billion), according to media reports.

Evergrande group has been on a selling spree lately, scrambling to raise funds to help resolve its serious debt woes and avert a default. 

Share trading of Hopson, Evergrande, along with its property management unit, was temporarily suspended on the Hong Kong stock market on Monday morning.

Hopson Development earlier said in a statement on Monday that its share trade halting was pending an announcement related to a major acquisition by Hopson of a Hong Kong-listed company.

Hong Kong stocks opened lower on Monday, with most of the real estate stocks and banking stocks falling, Evergrande's car unit fell about 6 percent at the opening.

As of June 30, Evergrande's total liabilities had swelled to 1.97 trillion yuan ($305 billion) on the back of 2.38 trillion yuan in total assets, per its interim financial disclosure at the end of August. Mirroring its indebtedness, the company's interest-bearing debts hit 571.7 billion yuan as of the end of June, among which debts due within a year stood at 240 billion yuan.

Evergrande's failure to pay overdue bills and its default on some wealth management products sold by the company, apparently fanned woes over its debt woes.

During a late-night conference in September, Evergrande group chairman Xu Jiayin said that the company will try to guarantee the quality and smooth delivery of the buildings of Evergrande's projects scattered in many Chinese cities, saying it is the company's obligation and responsibility.

The company has been actively exploring options with potential investors on the sales of part of its stakes in China Evergrande New Energy Vehicle Group Ltd, as well as purchasers for its office building in Hong Kong. It is uncertain whether the group will be able to execute those sales.

Global Times