Yahoo Finance China Evergrande Shares Plummet After Chairman Trims Stake
By Gina Lee
Investing.com – Developer China Evergrande Group's (HK:3333) shares fell as much as 4.8% on Monday after chairman Hui Ka Yan divested some of his stake in the company to raise about $344 million.
The company’s Hong Kong shares tumbled 8.40% to HK$2.29 ($0.29) by 11:53 PM ET (4:53 AM GMT). Shares in electric vehicle unit China Evergrande New Energy Vehicle Group Ltd. also tumbled 13.11% to HK$4.11 after China Evergrande said it was still exploring ways to pump capital into the unit with different investors.
Hui sold a total of 1.2 billion China Evergrande shares, the company said on Friday. The shares had an average price of HK$2.23 each, a 20% discount to the closing price on Nov. 24, and lowered Hui’s stake to 67.9% from 77%. The buyers were not disclosed.
China Evergrande has been desperately raising capital to tackle its more than $300 billion in liabilities and Chinese authorities have reportedly told Hui to use part of his personal wealth to help pay bondholders.
Investors are now waiting to see if the company will be able to meet its obligations on coupon payments totaling $82.5 million that were due on Nov. 6. The 30-day grace period for the payment ends on Dec 6.
China Evergrande is the most prominent player in the Chinese property sector to deal with debt woes and credit rating downgrades within the past few months, but it is far from alone. Fantasia Holdings Group Co. Ltd. (HK:1777)suspended trading in its own Hong Kong shares on Monday, pending the release of information. It said on Thursday that a winding-up petition was filed against a unit related to an outstanding loan.
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