Cash-strapped Evergrande raises $144m before payment deadline

·2-min read
Chinese property developer Evergrande is facing a looming debt interest payment deadline (AFP/Hector RETAMAL)

Crisis-hit property developer Evergrande has managed to raise around $144 million by slashing its stake in an internet company, days before a looming debt interest payment deadline.

Evergrande sold a 5.7 percent stake totalling HK$1.12 billion ($144m) in HengTen Networks Group in three separate transactions from last Thursday, Hong Kong stock exchange filings showed.

The indebted property developer faces a Wednesday deadline for an overdue $148 million offshore bond coupon payment it initially missed last month.

The crisis at one of China's biggest property developers has hammered investor sentiment, rattled the key real estate market and fuelled fears of a spillover into the wider economy.

Bogged down in a sea of debt worth more than $300 billion, Evergrande has been trying to dispose of its assets to raise cash.

But some offshore bond holders said they had not received payments of over $80 million that were due Saturday, Bloomberg reported.

The HengTen sale reduced Evergrande's stake in the internet services firm from 26.55 percent to 20.82 percent, according to the filings.

That leaves Tencent as the biggest remaining shareholder, with an almost 24 percent stake.

Evergrande was plunged into crisis after Beijing began clamping down on the country's colossal property sector last year, a move that has prompted rare public anger and protests from anxious homebuyers, suppliers and investors.

In October, Evergrande managed to avert default twice after making overdue interest payments to offshore bond holders.

In a bid to shore up investor confidence, it recently announced that it delivered over 57,000 properties to buyers between July and October.

But a planned deal to sell a $2.6 billion stake in its property arm to a Hong Kong developer fell through last month, sending shares tumbling as it resumed trading on the Hong Kong Stock Exchange after a 17-day suspension.

lxc/lb

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting