China Evergrande raises US$273 million with exit from HengTen as creditors await payments on local and offshore debt
- Embattled property developer faces more deadlines next week on overdue interest for domestic and offshore debt
- Evergrande is seeking to avoid a collapse under more than US$300 billion of liabilities while founder Hui Ka-yan injects cash from own pocket
“Upon completion of the transaction, the company will cease to hold any shares in HengTen,” Evergrande said. The beneficial owner of Allied Resources is Li Shao Yu, it added.
World’s most indebted developer, China Evergrande Group, buys time to repay more creditors
HengTen’s shares soared as much as 28 per cent in Thursday’s morning session in Hong Kong, following the announcement. The shares had lost nearly 90 per cent of their value since hitting a 52-week high in February. Evergrande tumbled 2.5 per cent to HK$2.73.
The HengTen group is principally engaged in film and television programmes production, distribution and online streaming platform business and other online services. It counts Tencent Holdings and its executive chairman Ke Liming among its other big shareholders.
The sale followed two blocks of HengTen transactions in August and earlier this month amounting to HK$4.37 billion. Today’s exit comes as Evergrande faces a November 23 deadline to make good on US$135 million in missed coupon payments on its offshore debt or face a default, as well as another 118 million yuan interest payment on its onshore debt on November 26.
However, the number and value of such defaults will remain a small portion of the total Chinese onshore and offshore bond markets, the credit rating agency said.