China Evergrande's Shengjing Bank Stake Sold for $1.05 Billion in Auction
By Clarence Leong
China Evergrande Group's stake in Shengjing Bank Co. was sold for 7.31 billion yuan ($1.05 billion), which an earlier disclosure showed had been pledged by a unit of the heavily indebted property developer in a financial arrangement.
A group of seven companies, including Shenyang Heping District State-owned Assets Management Co., successfully bid for the stake, which was auctioned by the Shenyang Intermediate People's Court, according to a bidding confirmation notice dated Wednesday on Taobao, an online marketplace run by Alibaba Group Holding Ltd.
There was only one bidder for the 1.28 billion shares in Shengjing Bank held by Evergrande, the auction listing showed. The shares represent Evergrande's entire 14.6% stake in the Hong Kong-listed lender.
In a late July filing, Evergrande said subsidiary Evergrande Group (Nanchang) Co. had provided counter guarantees to an unnamed entity by pledging the stake in the Chinese regional lender, which is based in Shenyang, the capital of Liaoning province.
The unnamed entity had provided guarantee for some of Evergrande's borrowings, but after the developer defaulted on the loans, the entity had to come up with CNY7.31 billion.
Evergrande said in the July filing that it had received an arbitration ruling that the unnamed entity "has the priority to receive compensation from the sale of the shares" in Shengjing Bank.
Evergrande, the world's most indebted property developer, had more than $300 billion in liabilities as of June 2021. It has promised to unveil an offshore restructuring plan before the end of the year.
Write to Clarence Leong at email@example.com
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September 07, 2022 06:25 ET (10:25 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.