China state firms takeover Evergrande’s $1.1 billion holding in Shengjing Bank

1 min read
FILE PHOTO: The China Evergrande Centre building sign is seen in Hong Kong

HONG KONG (Reuters) – State-owned companies of the Chinese northestern city of Shenyang bought China Evergrande Group’s shareholding in Shengjing Bank in an auction for 7.3 billion yuan ($1.05 billion), Alibaba auction platform showed on Wednesday.

In July, Evergrande, the world’s most indebted property developer, said its unit, Evergrande Nanchang, had been ordered to pay an unamed guarantor 7.3 billion yuan for failing to honour debt obligations.

The unit has provided counter-guarantees in the form of a pledge of a total of 1.3 billion shares that it held in Shenyang-based Shengjing Bank, the firm said at the time.

According to the auction platform, the 1.3 billion shares in Shengjing Bank owned by Evergrande Nanchang were auctioned by Shenyang Intermediate People’s Court at an opening bidding price of 7.3 billion yuan.

The winner, a group of seven companies including Shenyang Heping District State-owned Assets Management Company and Shenyang Hi Tech Development Investment Holding Group, was the only bidder in the auction that closed on Wednesday.

Saddled with more than $300 billion in liabilities, Evergrande is struggling to repay its many creditors through asset sales and debt restructuring.

The 1.3 billion shares account for a 14.6% stake in Shenjiang Bank. Evergrande, which held 36.4% in the bank at the end of 2020, has been selling down its holdings in the bank since it slid into a debt crisis in the second half of last year.

($1 = 6.9726 yuan)

(Reporting by Clare Jim and Beijing newsroom; Editing by Simon Cameron-Moore)

tagreuters.com2022binary_LYNXMPEI860AT-BASEIMAGE