Chinese Estates cuts its losses, heads for exit after 12 years as Evergrande's staunchest ally and second-largest shareholder

China Evergrande Group, initial public offering (IPO), real estate sales dwindled

China Evergrande Group’s second-largest shareholder Chinese Estates Holdings has dumped a major chunk of Evergrande shares at a loss and signalled the potential sale of its entire stake, as the staunchest ally that kept the world’s most indebted property developer afloat heads for the exit amid a debt crackdown.

Chinese Estates posted a loss of HK$1.38 billion (US$177.2 million) after selling 108.9 million Evergrande shares in the open market for HK$246.5 million, or HK$2.26 each on average from August 30 to September 21, according to a stock exchange filing. Evergrande’s shares changed hands at HK$3.42 on average during that period, according to Bloomberg's data.

The sole cornerstone investor in Evergrande’s November 2009 initial public offering (IPO), Chinese Estates held 751.09 million Evergrande shares, or 5.66 per cent of the Shenzhen-based developer, as of August 31, a stake which may be sold through block trades, or in one, or a series of transactions “depending on the prevailing market conditions,” according to its filing.

The disposal and possible exit by Chinese Estates, founded by the Hong Kong magnate Joseph Lau Luen-hung, is a significant bookmark in its ties with Evergrande’s chairman Hui Ka-yan, a relationship that spanned more than a decade. Chinese Estates has been either a buyer, or the seller, of every significant financial transaction by Evergrande since it went public 12 years ago.

China Evergrande Group, initial public offering (IPO), real estate sales dwindled

A billboard of Evergrande Real Estate Group at a construction site in the Jiangsu provincial city of Qidong, near Nantong, on 1 September 2012. Chinese Estates bought the project from Evergrande in June 2011 and then sold in 15 months later, booking a loss of HK$10.5 million. Photo: Imaginechina via AFP.

Chinese Estate bought US$50 million of Evergrande’s shares when Hui took the developer public in 2009, acting as the sole cornerstone investor in the offering.

Chinese Estates, then under the chairmanship of Lau’s son Lau Ming-wai, paid HK$13.59 billion to top up its Evergrande stakes in 2017 and 2018, picking up a total of 860 million Evergrande shares at an average price of HK$15.80 each, according to the filings. The average disposal price in August and this month was an 86 per cent discount to its purchase.

Lau and his wife Chan Hoi-wan are the highest-profile investors to be heading for the exit, as Evergrande grapples with finding cash to settle US$300 billion in liabilities. The company partially averted a default when it negotiated an “off-exchange” arrangement with bondholders to settle an interest payment on 4 billion yuan (US$619 million) of onshore bonds, estimated at 232 million yuan. The company has another US$83.5 million in interest payment due today in a dollar-denominated note.

China Evergrande Group, initial public offering (IPO), real estate sales dwindled

A map showing Chinese Evergrande Group’s projects at the Evergrande City Plaza in Beijing, on 22 September 2021. Photo: EPA-EFE

Chinese Estates, which owns several hotels, commercial property and residential complexes, has been relying on its portfolio investments for income, as real estate sales dwindled, receiving HK$156.5 million in first-half dividends from Evergrande.

The loss from its Evergrande disposal will tally up to a HK$10.86 billion loss in the year ending December 31, the company said.

The divestment of Evergrande shares was done due to “caution and concern about liquidity,” in case “the remedial measures said to have been taken and to be taken by Evergrande could not be effectively implemented,” Chinese Estates said.

China Evergrande Group, initial public offering (IPO), real estate sales dwindled

The China Evergrande Centre in Wan Chai, with a roof top billboard announcing the launch of Evergrande’s electric cars. Chinese Estates sold the 26-storey office tower, formerly called the Mass Mutual Tower, to Evergrande in 2015, but keeps its headquarters on the top floor. Photo: Edmond So

Evergrande’s shares jumped 32.2 per cent to an intraday high of HK$3, the biggest one-day jump in more than a year, on the prospect that the developer may negotiate its way out of a default. Chinese Estates jumped by 15.1 per cent to an intraday high of HK$2.51.

The Chinese government, anxious to prevent Envergrande’s collapse from saddling Chinese homebuyers with unfinished property, may step in to restructure and nationalise the developer, asiaMarkets.com reported, citing unidentified sources close to the Chinese government.

“The news, if true, is very positive as it suggests that central government is aware of the high potential risk related to Evergrande’s bankruptcy and it needs to take immediate measures to contain all these risks,” said Raymond Cheng, head of research of Hong Kong and China at CGS-CIMB Securities. “Dragged [down] by Evergrande in the past few months, the share prices of China’s property and property management [stocks] were hit markedly. We expect the share prices in both sectors to see strong rebound in the near term.”

Internet Explorer Channel Network
News Related

OTHER NEWS

Indian economy is bouncing back strongly: MoS for External Affairs V Muraleedharan

Representational image. Muraleedharan said the Narendra Modi government has undertaken “far-reaching” structural reforms, making use of the mantra of ‘Reform, Perform and Transform’. “These reforms range from digital transactions to ... Read more »

Procurement of expensive aircraft parts to be done after approval of senior official: Air India

Air India | Representative image New aircraft parts worth more than Rs 10 lakhs and non-aircraft parts worth more than Rs 5 lakh will now be procured only after the ... Read more »

Moneycontrol Area Watch | Jewar Airport brings tailwinds to projects along Yamuna Expressway

Buddh International Circuit (above) brought the Yamuna Expressway in the limelight, and now the proposed Jewar Airport is giving the area a leg-up. Buddh International Circuit – India’s first and ... Read more »

Inside Squid Game's Jung Ho-yeon and Blackpink Jennie's friendship – everything we know about Korea's hottest new celebrity BFF duo

Thanks to the global success of the hit Korean series Squid Game, Jung Ho-yeon has quickly become the girl to watch. Apart from blowing people away with her incredible acting ... Read more »

Effects of China's regulatory onslaught felt in Hong Kong as large IPOs fall by the wayside

Hong Kong’s primary-listing market is going through a dry patch in what is normally the busiest time of the year. Several potential billion-dollar initial public offerings ranging from supermarket owner ... Read more »

China's electric car start-ups turn to private equity, venture capital for funds as they are turned away from Shanghai's Star Market

China’s cash-hungry electric vehicle (EV) start-ups, are actively looking to private equity and venture capital for funding, as they seek alternative financing sources in the face of tougher thresholds for ... Read more »

Expect 8-12% market returns in next one year: Ajay Kejriwal of Choice Broking

Ajay Kejriwal, President at Choice Broking feels that Infosys (the growth leader in the sector) and TCS (a sector leader) will continue to attract investors’ interest, mainly on the back ... Read more »

Incessant rains lash Kerala; 'Red Alert' in 5 districts

Monsoon Heavy rains lashed Kerala, especially the south and central regions on Saturday, causing water-logging in several areas and leaving many rivers in spate, as the weathermen sounded ‘red alert’ ... Read more »

Cryptocurrency Prices Today on October 17: Polkadot plunges over 3%

Cryptocurrency (Representative image) Cryptocurrency prices continue to be in mostly in red on October 17. The global cryptocurrency market cap is Rs 185.34 lakh crores, a 0.36 percent decrease over ... Read more »

World Bank president David Malpass congratulates India on successful COVID-19 vaccination campaign

World Bank President David Malpass (Image: Reuters) World Bank president David Malpass on Saturday congratulated India on a successful vaccination campaign against the Covid-19 pandemic as he met finance minister ... Read more »

Why independent floors are staging a comeback this festive season

Builder floors are also gaining popularity because they combine the benefits of traditional apartments and villas. With one flat typically constructed on a single floor, occupying families have more space ... Read more »

Gati Shakti, digitisation, 'Make in India' discussed as Nirmala Sitharaman meets top CEOs in New York

Finance Minister Nirmala Sitaraman. The discussions that took place between Union Finance Minister Nirmala Sitharaman and the world’s leading business officers at the Big Apple in New York heavily emphasized on India’s ... Read more »

Congress slams 'catastrophic mishandling' of economy; says every aspect of democracy 'diminished'

19 Opposition parties including Congress will jointly launch a protest against the Centre (File image: PTI) The Congress hit out at the Centre over what it said was ”catastrophic mishandling” of the economy and also alleged ... Read more »

SIA sees moderate uptick in September passenger traffic on VTL tailwind

The group’s total passenger traffic rose by 4.4 per cent in September. SINGAPORE (THE BUSINESS TIMES) – The vaccinated travel lane (VTL) arrangement has helped lift demand for Singapore Airlines ... Read more »

"Democracy survived" Capitol riot because of police: Joe Biden

Joe Biden addressing UN General Assembly (Image: Twitter/@ANI) Framed by the Capitol, President Joe Biden paid tribute Saturday to fallen law enforcement officers and honored those who fought off the Jan. 6 ... Read more »

Investors in two-thirds of companies listed globally risk losing US$8.4 trillion because of declining ocean health: WWF

Investors in two-thirds of companies listed around the world were at the risk of losing US$8.4 trillion – or around a tenth of global gross domestic product (GDP) – due ... Read more »

Chinese realtor's $300-billion debt: Evergrande CEO in restructuring, asset sale talks

Evergrande Group’s chief executive is holding talks in Hong Kong with investment banks and creditors over a possible restructuring and asset sales, two people said, as the Chinese developer battles ... Read more »

It isn't just the UK that's suffering supply chain issues. In the US, the crisis may last until the summer

A trucker at the Port of Long Beach in California has said "sometimes drivers get mad" because they are waiting double the time they usually would for one load. Read more »

Busan film festival hit Fanatic's director on the K-pop fans it features who – like her – fell in love with celebrities later convicted of crimes, and their mixed feelings afterwards

What does it mean to be a fan of someone who turns out to be a criminal? That’s what South Korean film student Oh Se-yeon wanted to explore in her ... Read more »

Was Sie über die Krise bei Evergrande wissen sollten

Der drohende Kollaps des chinesischen Immobiliengiganten Evergrande beschäftigt die Märkte nun schon seit Wochen – und ein Ende ist nicht in Sicht. Das Unternehmen ächzt bereits seit Monaten unter einer ... Read more »

NCB raids 2 places in Palghar, seizes 505 gm mephedrone; 1 held

Representative image Over 500 grams of mephedrone were seized in two separate Narcotics Control Bureau operations in neighbouring Palghar district, leading to the arrest of one man, an official said ... Read more »

Amazon seeks to invest in SK Telecom's non-telecom operations

Amazon, the world’s largest online retailer, collaborated with SK Telecom’s e-commerce platform 11Street to launch its Korean language shopping service dubbed the Amazon Global Store at the end of August. ... Read more »

Meeting with Putin to be crucial for gas contract, says Serbian President

Aleksandar Vucic said earlier that he planned to discuss the gas price for Serbia with Putin at a meeting on November 25 Read more »

Russia warns EU: natural gas shortage could become more frequent

Novak also echoed Russian President Vladimir Putin’s message that Russia is ready to supply Europe with more gas. But requests to supply more gas have not yet come in from ... Read more »

Nike CEO makes shocking confession: ‘I used to shoot a teenager'

A prominent executive of a sports brand has revealed in a controversial interview that he shot and killed a teenage boy in the 1960s. It concerns 72-year-old Larry Miller, CEO ... Read more »

Rosatom plans launch of four hydrogen production projects in 2024-2025

The Kaliningrad and Murmansk projects are planned to focus on European markets, whereas two projects to be implemented in Sakhalin will be mainly focused on Asian-Pacific countries Read more »

Cricket-BCCI chief Sourav Ganguly hopeful IPL 2022 will be held in India

BCCI President Sourav Ganguly (Image: Reuters) Indian cricket board president Sourav Ganguly expects next year’s Indian Premier League (IPL) to be played in the country after the COVID-19 pandemic forced ... Read more »

Russia to set new domestic gas consumption record in 2021, says Novak

Deputy Chief Executive Officer of Gazprom Vitaly Markelov said earlier that the current gas consumption in Russia exceeds the levels of 2019 and 2020 Read more »

Home registrations in Kolkata jump over 2 times in July-September on stamp duty cut

Real Estate Registration of residential properties in Kolkata metropolitan area jumped more than twofold to 15,160 units during July-September period mainly driven by stamp duty reduction by the state government, ... Read more »

Elon Musk Shades Other High Earners: Wealth Above $230 Billion

Musk, who has long held the title of ‘richest person’, has built up a fortune of $236 billion, according to Bloomberg news agency. Especially the hard ride up of the ... Read more »

Gem, jewellery exports rise 29% to Rs 23,259 crore in September

Representative image Gems and jewellery exports rose by 29.67 per cent to Rs 23,259.55 crore in September 2021 compared to Rs 17,936.86 crore in the year-ago month, according to the ... Read more »

MEA S Jaishankar on Israel visit from October 17-21, will hold talks to strengthen strategic ties

(File image: External Affairs Minister S Jaishankar) External Affairs Minister S Jaishankar will pay an official visit to Israel beginning Sunday during which he will hold talks with his Israeli ... Read more »

Fed Worried About Inflation Risk as It Firmed Up Tapering Plan Central bank prepares to begin reducing asset purchases next month and eyes end to stimulus program by mid-2022

The Labor Department said consumer prices rose a seasonally adjusted 0.4% in September from August. (Photo: AFP) Federal Reserve officials last month worried that disrupted supply chains were raising the risks ... Read more »

Italy unveils G20 Innovation League to promote startups for sustainable future

The current Italian Presidency of the G20 has unveiled G20 Innovation League, a new and unique initiative designed to drive forward innovative projects that help create a sustainable future. The ... Read more »

Centralcon's Sha Tin housing project launch gets off to a slow start as buyers hold out for better options amid robust supply

A weekend property sale got off to a slow start in Hong Kong, as homebuyers balked at flats offered by lesser known developers in a market where thousands of new ... Read more »

Avenue Supermarts Ltd. Q2 Result | Profit rises 110% YOY to Rs 418 crore, revenue grows 46.6% YOY to Rs 7,789 crore

Avenue Supermarts Ltd, which operates DMart chain of retail stores, has reported consolidated profit after tax of Rs 418 crore for the quarter ended September 2021, an increase of 110% ... Read more »

Ukraine's wish to pay 20-30% higher for Russian gas surprises Moscow, says Novak

Ukraine’s wish to continue buying Russian gas through reverse-flow supplies, Russia Deputy Prime Minister said Read more »

Hut Group founder Moulding to give up golden share in bid to restore City confidence

Sky News has learnt that the owner of The Hut Group, which floated just over a year ago, will announce next week that it plans to move its listing to the premium segment of the London Stock Exchange in 2022. Read more »

HDFC Bank Q2 Result | Profit grows to Rs 8,834 crore, net interest income rises to Rs 17,684 crore

Representative image HDFC Bank, the largest private sector lender in India, has reported standalone profit at Rs 8,834.31 crore for September 2021 quarter, 17.6% percent higher compared to Rs 7,513.11 crore in ... Read more »

Novak does not rule out recurrence of energy crisis in Europe, urges its prevention

The gas shortage in Europe’s underground gas storage facilities currently stands at around 25 bln cubic meters, Russia Deputy Prime Minister said Read more »