Oct 21, 2021 06:16 AM

Evergrande’s $2.6 Billion Property Management Sale Falls Through


What’s new: China Evergrande Group dropped discussions to sell its property management unit to Hopson Development Holdings Ltd. just weeks after disclosing a potential deal that would give the cash-strapped developer a major boost.

In a Wednesday filing, Evergrande said talks to sell 50.1% of its shares in Evergrande Property Services Group Ltd. for about HK$20 billion ($2.6 billion) were terminated last week. Hopson Development confirmed the end of the negotiations in a separate statement, saying it “regrets to announce that the vendor has failed to complete the sale.”

Evergrande said it “had reason to believe — based on information from various sources — that the purchaser had not met the prerequisite to make a general offer for shares in Evergrande Property Services,” and so Evergrande exercised its right of termination.

Both companies asked to resume share trading in Hong Kong that was suspended since Oct. 4 pending the talks.

Why it matters: The failed deal will add more pressure to Evergrande’s struggle to deal with a massive debt crisis that some market observers say will ripple through the country’s financial system and real estate industry.

With more than $300 billion in liabilities, the Chinese property development giant has been seeking buyers for some of its assets to ease the liquidity crunch. In August, Evergrande confirmed that it was trying to sell its interests in Evergrande Property Services and China Evergrande New Energy Vehicle Group Ltd., news that temporarily boosted the stock price.

Evergrande faces interest payment deadlines on several dollar bonds this week after a 30-day grace period ends.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Han Wei ( and editor Bob Simison (

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

You've accessed an article available only to subscribers
Share this article
Open WeChat and scan the QR code