Chinese developer Evergrande sells a $273 million interest in a streaming company
Image credit: Malay Mail
Crisis-hit Evergrande, a Chinese real estate giant, is selling its whole share in HengTen, a film and television streaming platform, for $273 million (£200 million).
The news comes as the world’s most indebted developer tries to pay back its loans’ interest. Another large firm is reportedly raising new capital, reflecting the housing sector’s liquidity difficulties.
Trading in Country Garden Services was halted on Thursday as the company prepared to offer $1 billion in new stock.
Evergrande, which has approximately $300 billion in debt, has stated that the sale of its remaining 18% stake in HengTen will result in a loss of more than $1 billion. It raised $145 million last week by selling a 5.7 per cent stake in HengTen.
The agreement was announced just one day before the $148 million in outstanding interest payments were due. Evergrande has avoided defaulting on its loans thus far by making late payments just before grace periods of 30 days ended.
Evergrande had a majority stake in HengTen, dubbed the “Netflix of China,” at the start of the year but has been selling shares to meet its financial obligations.
Tencent, a Chinese technology company, is HengTen’s other major corporate shareholder, having purchased a 7% interest from Evergrande in July for $266 million.
Evergrande’s stock was down approximately 2.5 per cent on Thursday, while HengTen’s stock was up more than 23 per cent. Meanwhile, according to rumours, Hong Kong-listed Country Garden Services will sell 150 million fresh shares at a discount of over 10% to their last traded price.
According to reports, the money will be used for possible takeovers, new business growth, and general corporate reasons. Country Garden’s stock dropped 4.2 per cent.