Evergrande is on the verge of a billion-dollar stake sale

According to media reports, the ailing real estate giant China Evergrande is on the verge of a billion-dollar stake sale. The group plans to sell 51 percent of its property management subsidiary Evergrande Property Services Group to competitor Hopson Development for more than five billion dollars, as reported by the Chinese state newspaper "Global Times" and other newspapers. Hopson and Evergrande did not comment on this. However, their shares were suspended from trading on the grounds that a major transaction was announced. Evergrande would give itself some breathing space with the sale of the stake. The second largest real estate developer in China is groaning under a mountain of debt of more than $ 300 billion and is in arrears with creditors, suppliers and customers. In the past few days, Evergrande has already missed deadlines for the payment of bond interest several times. Another $ 162 million in interest is due in October. Investors worry that a collapse of Evergrande will have far-reaching consequences for the financial system and other industries. Many therefore hope for government support. The government in Beijing asked state companies last week to take over parts of Evergrande, Reuters reported, citing insiders. The sale of shares in the property management subsidiary is an important step to contain Evergrande's liquidity crisis, said economist Gary Ng of Bank Natixis. "We expect more of this to come." Evergrande is now apparently trying to get cash to pay bills, said analyst Ezien Hoo from broker OCBC. "It looks like the real estate management unit is still the easiest to dispose of." The shareholders of the Evergrande subsidiary for electromobility were also hoping for a possible new partial owner. Their shares shot up 29 percent. However, concerns about a collapse of the real estate giant were once again on the global stock exchanges. Equity markets in Hong Kong and Japan fell, the Dax was under pressure and a weaker opening appeared in the US. "The Chinese government still has little insight into the fate of Evergrande, although a slow and steady breakdown of the company seems to be the preferred route at the moment," said market analyst Jeffrey Halley of online Borker Oanda.