Dhe sluggish Chinese real estate company Evergrande has failed with its plans to sell a large stake in its service division worth billions. Evergrande was recently in negotiations to sell 50.1 percent of its subsidiary Evergrande Property Services to its smaller rival Hopson Development for the equivalent of around 2.6 billion dollars. Evergrande said in a statement to the stock exchange on Wednesday that the group had reason to believe that Hopson did not meet the requirements to make an offer. Evergrande did not provide any further details.
Hopson said the company was ready to close the deal. However, on October 13th it received a notification from Evergrande that the transaction had been canceled. As early as Tuesday, insiders reported that sales had been stopped. Evergrande sits on a mountain of debt equivalent to more than $ 300 billion and has already missed several deadlines for interest payments due to its bondholders. Given the size of the debt, there are concerns that a collapse of the group could trigger a conflagration in the Chinese real estate sector. In a further announcement to the stock exchange, Evergrande also announced, except for the sale of a stake in Shengjing Bank for $ 1.5 billion, there was no progress in the sale of assets.
The real estate company announced steps to address its liquidity problems. Evergrande will make the greatest efforts to obtain a renewal or extension of loans from the creditors, the company said. However, given the difficulties, there is no guarantee that Evergrande will be able to meet its payment obligations. A grace period of 30 days will soon expire for a bond interest payment due in September.