Evergrande chairman Hui Ka-yan forced to sell pledged shares in embattled developer
- Hui Ka-yan’s stake in Evergrande has fallen to 59.78 per cent from 61.88 per cent following the forced share sale
- While no transaction value was provided, the shares were worth HK$498 million (US$64 million), according to Bloomberg
Hui Ka-yan, the chairman of China Evergrande Group, has been forced to sell shares in the debt-ridden developer to fulfil an obligation.
Hui, 63, saw his stake in Evergrande drop to 59.78 per cent from 61.88 per cent following the share sales between December 6 and 9, which was undertaken to enforce a “security interest”, according to a filing to the Hong Kong stock exchange. The disclosure came a day after the developer was officially labelled a defaulter for the first time.
The sales involved a total of 277.8 million shares, but no transaction value was given. The shares were worth HK$498 million (US$64 million), based on the average price when they were sold this week, according to Bloomberg.
Typically, shares pledged with a creditor as a “security interest” or collateral can be sold in case a loan goes bad. The filing did not reveal the name of the third party.
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“The share sale shows that Hui is facing growing pressure personally to deal with Evergrande’s debt woes,” said Ding Haifeng, a consultant at Shanghai-based financial advisory firm Integrity. “He may have to use more of his own money to pay back the company’s debts.”
Evergrande is the world’s most indebted developer with more than US$300 billion of liabilities.