Evergrande is about to sell its property management unit, a deal that could provide the company with much needed cash to settle it’s debts.
Evergrande which was once China’s top-selling property group is battling to survive with a debt of around $305 billion. It has likely missed two bond payment deadlines in recent weeks and its stock has crashed 80% so far this year.
Hopson Development plans to take over Evergrande’s property management arm by buying a stake of about 51% in a deal that could be worth more than 40million Hong Kong dollars (5.1billion).
However, Hopson disclosed that it has suspended trading in its shares, pending an announcement related to a major acquisition of a Hong Kong-listed firm and a possible mandatory offer.
Evergrande and its associates owned almost 61% of Evergrande Property Service, the unit Hopson is said to be buying as of May.
With liabilities equal to 2% of China’s gross domestic product.
Evergrande has sparked concerns its troubles could spread over the global financial system.
