China state firms acquire Evergrande’s $1.1B holding in Shengjing Bank

china state firms acquire evergrande holding

State-owned companies in the northeastern Chinese city of Shenyang acquired China Evergrande Group’s stake in the Shengjing Bank in a sale for 7.3 billion yuan ($1.05 billion), the Alibaba auction platform revealed.

In July 2022, Evergrande, the world’s most indebted property developer, said its unit, Evergrande Nanchang, had been ordered to pay an unnamed guarantor of 7.3 billion yuan to honor debt responsibilities.

The unit has provided counter-guarantees as a pledge of 1.3 billion shares held in Shenyang-based Shengjing Bank, the firm said at the time.

According to the auction platform, the 1.3 billion shares in Shengjing Bank owned by Evergrande Nanchang were auctioned by Shenyang Intermediate People’s Court at an opening bidding price of 7.3 billion yuan.

The winner, a group of seven companies including Shenyang Hi-Tech Development Investment Holding Group and Shenyang Heping District State-owned Assets Management Company, was the only bidder in the auction that closed on Wednesday.

With over $300 billion in liabilities, Evergrande struggles to repay its many creditors through debt restructuring and asset sales.

The 1.3 billion shares account for a 14.6% stake in Shenjing Bank. Evergrande held 36.4% in the bank at the end of 2020. The firm has been selling down its holdings since it slid into a debt crisis in the second half of 2021.