Evergrande Founder Sells 9 Percent Stake for $344 Million Amid Debt Crunch

By Reuters
November 26, 2021 Updated: November 26, 2021

HONG KONG—The chairman of China Evergrande Group Hui Ka Yan sold 1.2 billion shares in the company at an average price of HK$2.23 each on Thursday, Hong Kong Stock Exchange filings show.

The share sale, which is worth a total of HK$2.68 billion ($344 million), lowers Hui’s stake in the Shenzhen-based real estate company to 67.9 percent from 77 percent.

Evergrande has been stumbling from debt deadline to deadline as it grapples with more than $300 billion in liabilities.

Men ride bicycles past construction sites near the headquarters of China’s Evergrande Group in Shenzhen, Guangdong Province, China, on Sept. 26, 2021. (Aly Song/Reuters)

Hui, who is the property developer’s founder, is now freeing up funds by selling luxury assets including art, calligraphy, and three high-end homes.

Evergrande failed to pay coupons totalling $82.5 million due on Nov. 6 and investors are on tenterhooks to see if it can meet its obligations before a 30-day grace period ends on Dec 6.

Hui’s share sale represented a 19.8 percent discount to Wednesday closing price of HK$2.78. Data from the exchange shows block trades priced at HK$2.23 per share were carried out in the pre-market on Thursday.

Before the filings, Evergrande shares closed down 10.4 percent at HK$2.5, versus a 2.7 percent drop in the broader market.

($1 = 7.7959 Hong Kong dollars)