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CHINESE ESTATES HOLDINGS LIMITED

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Chinese Estates : One of Evergrande's main investors looks to offload stake

09/23/2021 | 01:04am EDT

(Update 1: Adds Chinese Estates info, changes headline, minor edits)

Shanghai, China, Sep 23 (EFE).- Property investment company Chinese Estates, one of the main shareholders of the Chinese developer Evergrande Group, announced on Thursday its plans to divest its stake in the company due to its serious financial situation.

In a statement sent to the Hong Kong Stock Exchange, where it is listed, Chinese Estates said that its directors are "concerned" about the recent developments of the Evergrande Group and the "possible consequences" in the event that the remedial measures it has announced "could not be effectively implemented."

Chinese Estates is one of Evergrande's main corporate investors, controlling 5.66 percent of its shareholding as of Aug. 31.

Since then, it has sold almost 109 million shares, about 0.82 percent of Evergrande's shareholding, for a total of HK$246.5 million ($31.7 million).

After consulting with its shareholders, the company will now have a maximum of 12 months to dispose of the remainder of its stake, although it will try to do so quickly in view of Evergrande's continuously declining stock price.

If it manages to sell its entire stake in Evergrande, Chinese Estates estimates that it will record a loss of HK$9.486 million for the year ending Dec. 31.

Chinese Estates' announcement seemed to calm its investors as its shares opened 13.3 percent up on Thursday, although after 11 am they had moderated to just over 5 percent.

Meanwhile, Evergrande shares listed in Hong Kong soared more than 20 percent in the first few minutes of the trading session on Thursday.

At 10 am, after half an hour of trading, the company's shares rose 22.47 percent to HK$2.78 ($0.36 dollars).

In the preceding minutes, the company's share price had surged more than 31 percent.

Despite the rebound, the value of Evergrande's share at the Hong Kong stock market has fallen more than 40 percent in the last month and over 80 percent since the beginning of the year.

In recent weeks, investors and analysts globally have been monitoring Evergrande's liquidity problems that have raised concerns about its debt payments.

While the deadline for an $83.5 million interest payment on bonds issued in dollars expires on Thursday, the Chinese giant is also due to pay another $47.5 million in interest before Sep. 29.

On Wednesday, the group's main subsidiary, Hengda Real Estate Group Co. Ltd, announced that it would make the $36 million interest payment on its Shenzhen-traded 5.8 percent September 2025 bond on time.

However, the company has not yet confirmed whether it will also do the same for its offshore dollar bonds. EFE

© 2021 EFE News Services (U.S.) Inc., source EFE Ingles

Stocks mentioned in the article
ChangeLast1st jan.
CHINESE ESTATES HOLDINGS LIMITED 1.32% 3.83 End-of-day quote.1.32%
EVERGRANDE PROPERTY SERVICES GROUP LIMITED 2.40% 5.12 End-of-day quote.-42.73%
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Financials
Sales 2020 2 991 M 384 M 384 M
Net income 2020 622 M 80,0 M 80,0 M
Net Debt 2020 3 849 M 495 M 495 M
P/E ratio 2020 11,6x
Yield 2020 0,53%
Capitalization 7 306 M 939 M 939 M
EV / Sales 2019 11,6x
EV / Sales 2020 3,70x
Nbr of Employees 473
Free-Float 25,0%
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Managers and Directors
Hoi Wan Chan Chief Executive Officer & Executive Director
Ming Wai Lau Chairman
Chi Ming Kong Head-Operations
Kwong Wai Lam Secretary, Executive Director & CIO
Kwok Wai Chan Independent Non-Executive Director