Once China's top-selling property group, Evergrande is facing one of the country's largest-ever defaults as it struggles with more than $300 billion of debt
Debt-saddled China Evergrande is set to raise more than $5 billion by selling a majority stake in its property management arm, Chinese media said on Monday, a deal which would be the struggling giant's largest asset sale yet if it goes ahead.
Once China's top-selling property group, Evergrande is facing one of the country's largest-ever defaults as it struggles with more than $300 billion of debt. Its fate is also unsettling global markets wary about the fallout of one of China's biggest borrowers toppling.
Evergrande on Monday said it requested a halt in the trading of its shares in Hong Kong pending an announcement about a major transaction. Evergrande Property Services Group, a spin-off listed last year, also requested a halt and said it referred to "a possible general offer for shares of the company."
China's state-backed Global Times said Hopson Development was the buyer of a 51% stake in the property business for more than HK$40 billion ($5.1 billion), citing unspecified other media reports. Hopson also said it had suspended its shares, pending an announcement related to a major acquisition of a Hong Kong-listed firm and a possible mandatory offer.
Neither Hopson nor Evergrande responded to requests for comment on the Global Times report.
Analysts said the possible deal signals the company is still working to meet its obligations. But it also underscored concerns about the rest of China's property sector and the broader economy if there is a fire-sale of Evergrande's assets.
"Selling an asset means they are still trying to raise cash to pay the bills," said OCBC analyst Ezien Hoo. "Looks like the property management unit is the easiest to dispose in the grand scheme of things."
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