Evergrande founder sells 9% of his shares to face debt

Xu Jiayin, founder of the indebted Chinese real estate giant Evergande, sold for $ 344 million 9% of its shares in the company, in a new attempt to obtain liquidity to meet the obligations of the firm, local media reported today.

In this way, Xu disposed of 1.2 billion shares of Evergrande at an average price of US $ 0.29 on the Hong Kong Stock Exchange last Thursday, 20% below the price at which the shares closed the previous day. .

According to the private digital newspaper Caixin, this is the first time that the executive reduces his stake in the company since it began trading in 2009. With this sale, its founder’s stake in Evergrande becomes 67.8% compared to 76.9% prior to the operation..

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Before disposing of part of his shares, the millionaire, until four years ago the richest man in China, would have already injected the equivalent of almost 1,100 million dollars after selling personal assets or participations to keep the firm afloat.

The company must face a liability that exceeds US $ 300,000 million, of which some US $ 37,000 million correspond to debts payable before the end of the first half of 2022. In addition, this month, the conglomerate also announced the sale of your stake in the streaming platform (live broadcasts) Hengten for US $ 273 million.

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Also, in recent weeks, Evergrande has been on the verge of defaulting on its offshore bonds several times, entering into extensions to pay the amounts owed to its investors after not doing so on the agreed date, although for the moment it has not definitively breached any of its obligations. The Chinese authorities have already indicated that the priority is for both Evergrande and other struggling promoters to finish build projects that are paralyzed due to lack of funds, in part due to the financing restrictions that Beijing has imposed since last year on the most indebted real estate companies.

This week Canton city authorities they withdrew Evergrande’s license from the land where it was building a large stadium for its soccer team, which was to be the largest in the world built specifically for this sport, with a capacity of 100,000 spectators and an estimated cost of about US $ 1,878 million.

Source: EFE