China’s Evergrande slides almost 6% after booking a $1 billion loss on the sale of its stake in streaming service HengTen


Evergrande HQ
A residential complex built by Evergrande in Beijing.

  • Shares in Evergrande fell Thursday after it sold its entire stake in Chinese streaming platform HengTen.
  • The cash-strapped Chinese property developer will get $273 million from the deal, but will also book a $1 billion loss.
  • Evergrande has been holding fire-sales of its assets, incurring losses as it tries to ease its $300 billion debt burden.

Shares in Evergrande fell 5% on Thursday after the cash-strapped Chinese property developer sold its entire stake in a major tv and film streaming service.

Evergrande is disposing of the 18% holding in film and streaming television company HengTen Networks for HK$2.13 billion ($273.5 million), it said in a Wednesday filing to the Hong Kong stock exchange. It said it will book a loss of HK$8.5 billion ($1.09 billion) on the sale.

The Chinese real-estate giant is the world’s most indebted developer, with $300 billion in liabilities. It has been holding fire-sales of its corporate assets, incurring huge losses to free up liquidity.

Last week, it sold Dutch electric motor maker e-Traction for 2 million euros ($2.27 million) — a 97% discount on its purchase price of 500 million Chinese yuan ($78.4 million).

Evergrande shares closed 5.7% lower Thursday at 2.64 Hong Kong dollars ($0.34). The company’s stock price has plunged about 85% over the last year. The broader Hang Seng index dropped 1.3%, while China’s CSI 300 fell just under 1%.

The Chinese property giant has managed to pay off several overdue bond coupons just in time, averting a default that could send the rest of the property sector in the country — and possibly, the rest of the world — into crisis.

But it failed to pay $82.5 million in coupons that were due on November 6, and investors are waiting to see whether it can meet those obligations before a 30-day grace period deadline of December 6.

Chinese authorities have reportedly instructed Evergrande founder and chairman Hui Ka Yan to use his own money to pay down the debt.

Hui has already used about 7 billion Chinese yuan ($1.1 billion) of his own funds raised from selling and pledging assets to keep the company going, according to China Business News (CBN).

Currently, it’s just Hui “personally raising money” for Evergrande, CBN reported, citing an unnamed source familiar with the matter.

Evergrande did not immediately respond to Insider’s request for comment.



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