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China property: Evergrande’s Hengda unit to sell stake in Shantou project for US$19.4 million as Hong Kong court hearing nears

  • Hengda Real Estate Group Yuedong is selling its entire 65 per cent stake in Shantou Hengmeng Property Development for US$19.4 million, according to an exchange filing
  • A Hong Kong court will hear the company’s debt restructuring proposal on Monday, after adjourning a petition for the seventh time last month

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China Evergrande is selling its stake in a property development in Shantou, in eastern Guangdong province. Photo: Bloomberg
Martin Choi

A unit of China Evergrande Group, the most indebted property developer in mainland China, has agreed to sell its stake in a project in Shantou, southern Guangdong province, continuing to pare down assets as it awaits the fate of its debt restructuring proposal.

The subsidiary, Hengda Real Estate Group Yuedong, will sell its entire 65 per cent stake in Shantou Hengmeng Property Development for 137.6 million yuan (US$19.4 million), according to a filing to the Hong Kong stock exchange on Thursday evening.

“The disposal serves to revitalise the group’s projects, promote the resumption of work and construction of existing projects, and safeguard the legitimate rights and interests of project investors, creditors and homebuyers,” Evergrande said in the filing.

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Last month, a Hong Kong court granted Evergrande another reprieve, adjourning a hearing until January 29 and giving the company more time to restructure its debts. This was the seventh time the petition had been adjourned.
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As part of the transaction, part of the debt amounting to 376 million yuan owed by Hengda and related parties to Shantou Hengmeng, will be waived.

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