By P.R. Venkat

China Evergrande Group is planning to raise nearly 10 billion yuan ($1.55 billion) by selling part of its stake in Shengjing Bank to a state-owned enterprise as part of efforts by the debt-laden conglomerate to meet its financial obligations.

Evergrande has entered into an agreement to sell a 19.93% stake in the bank to Shenyang Shengjing Finance Investment Group Co., it said Wednesday.

The conglomerate, which has businesses spanning from property to finance to electric vehicles, will sell a total of 1.75 billion non-publicly traded domestic shares in the bank for CNY5.70 per share.

The transaction is subject to approval from the China Banking and Insurance Regulatory Commission and the Assets Supervision and Administration Commission.

Evergrande said that its liquidity crunch had adversely affected Shengjing Bank in a material way.

"The introduction of the purchaser, being a state-owned enterprise, will help stabilise the operations of Shengjing Bank," Evergrande said.

Post divestment, Evergrande which will have a 14.75% stake in the bank.

Shenzhen-based Evergrande, is the world's most indebted real-estate developer and China's largest issuer of junk-rated debt, with around $19 billion of publicly traded dollar bonds outstanding. Prices of those bonds have fallen far below face value, reflecting investors' pessimism about Evergrande's ability to repay its debts.

Investors who own some of the group's U.S. dollar bonds hadn't received an interest payment from the property giant by last Thursday's deadline, people familiar with the matter had said.

If Evergrande doesn't pay within a 30-day grace period, that would set the stage for what could be the largest-ever dollar-bond default by a company in Asia.

Write to P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

09-28-21 2031ET