Evergrande sells the last of its stake in Shengjing Bank to Chinese state firms for US$1 billion

The world’s most indebted developer sold 1.28 billion non-public shares, amounting to a 14.57 per cent stake, to a consortium comprising seven companies

The shares were sold through an auction arranged on Taobao

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Evergrande, which once was Shenjing Bank’s biggest shareholder, has sold its entire stake in the lender. Photo: VCG/VCG via Getty Images

Published: 4:24pm, 7 Sep 2022Updated: 4:31pm, 7 Sep 2022

China Evergrande Group, the world’s most indebted developer, has exited its investment in a bank in northeastern China, selling its remaining 14.57 per cent stake for 7.3 billion yuan (US$1.04 billion).

The Shenzhen-based developer, which has US$300 billion of liabilities, sold 1.28 billion non-public shares in the Shenyang-headquartered Shengjing Bank through an online auction on Taobao, arranged by a local court.

The buyer was a seven-member consortium comprising three state-owned companies from Shenyang, the capital of northeast Liaoning province, and four private firms from Beijing and northwestern Shanxi province.

Evergrande, which was once the bank’s biggest shareholder, first sold a stake in 2018 for 10 billion yuan. In late 2019, the developer sold another 19.93 per cent stake for just under 10 billion yuan to the state-owned Shenyang Shengjing Finance Investment Group.

Evergrande has some US$300 billion of liabilities, making it the world’s most indebted developer. Source: Bloomberg

In May, Chinese media outlet Caixin reported that the mainland’s top banking watchdog was investigating connected transactions worth more than 100 billion yuan between Evergrande and the bank.

In July, the city of Shenyang said it would undertake reforms at Shengjing Bank and strengthen the bank’s Communist Party leadership to help it develop into “a good bank”. It also said it would encourage local state-owned companies to increase their stakes in the lender.