Evergrande Indicates News of 'Major Transaction' Coming

Shares in the company were suspended from trading Monday in Hong Kong
By Kate Seamons,  Newser Staff
Posted Oct 4, 2021 8:42 AM CDT
Evergrande Indicates News of 'Major Transaction' Coming
A security guard stands on duty at the headquarters of China Evergrande Group in Hong Kong, Monday, Oct. 4, 2021.   (AP Photo/Vincent Yu)

Shares in the beleaguered China Evergrande Group were suspended from trading by the Hong Kong exchange Monday ahead of what the company says is "an announcement containing inside information about a major transaction." The Guardian reports that generated buzz that it would be selling its profitable property management unit, Evergrande Property Services. A report in the Global Times of China gave credence to that speculation, saying rival Hopson Development was poised to acquire a 51% stake in that unit at a cost in excess of $5 billion.

Hopson's own moves suggest that is the case. The AP reports that company suspended trading of its shares in Hong Kong on Monday as well. The suspension was “pending the release of announcement(s) in relation to a major transaction of the company," per a filing. The teetering behemoth has been wrangling to avoid defaulting on a staggering $310 billion of outstanding debt but has fallen behind in payments to global bondholders in recent days.

The BBC reports Evergrande has been making moves to generate cash, including last week's sale of its $1.5 billion stake in a commercial bank. The Wall Street Journal reports Evergrande has been focusing on selling assets that sit outside its core development business, among them a stake in its electric-vehicle division and a Hong Kong office building. An analyst tells the AP that a takeover of the company's property management arm would be a step toward restructuring Evergrande by dividing it into smaller entities. (Read more Evergrande stories.)

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