Evergrande shares rise as it appoints state-owned company official to board; peers sell assets

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A partially removed corporate logo of China Evergrande Group is seen on the facade of its headquarters near a traffic light in Shenzhen, Guangdong province, China January 10, 2022. REUTERS/David Kirton/

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  • Evergrande appoints head of China Cinda Asset Management unit to board
  • Agile sells stake in mixed-use complex to partner JV COLI
  • Shimao is trying to sell a stake in the same complex to COLI -media
  • Shimao said on Friday it sold the unit to a public entity
  • Evergrande, Agile and Shimao shares rise

HONG KONG, Jan 24 (Reuters) – Shares of China Evergrande Group (3333.HK) rose on Monday after a public company representative was appointed to its board, while two of its peers sold assets to public entities, hoping to expand. State intervention to help the real estate sector in crisis.

Evergrande’s assets are set to be taken over by state-owned companies as part of a restructuring led by the provincial government of Guangdong, where the developer is based, and the appointment of a unit manager of a company manager. State Assets to its board of directors could signal the restructuring was progressing.

As of 0600 GMT, shares of Evergrande were up 6.2%.

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Other gainers included Agile Group (3383.HK) and Shimao Group (0813.HK), up 7.6% and 3.3% respectively, on news related to corporate asset sales backed by the ‘State. The Hang Seng Mainland Properties Sub-Index (.HSMPI) edged up 0.6%.

Evergrande’s actions were also buoyed by a report by financial intelligence provider REDD on Friday that the Guangdong provincial government was aiming to release a master plan to restructure the developer’s debt by March.

It plans to spin off the company’s offshore assets and sell them to pay off foreign debt, in a bid to boost foreign lenders’ hopes of recovering some funds, the report added. Read more

Evergrande has more than $300 billion in debt, including nearly $20 billion in international bonds, all deemed to be in default after a series of missed payments late last year.

The developer announced on Sunday that it will appoint two new board members, including non-executive director Liang Senlin, chairman of China Cinda (HK) Holdings Company Limited, a unit of China Cinda Asset Management (1359.HK) – one of four in the country. largest state asset managers.

Evergrande set up a risk management committee last month, made up mostly of senior officials from state entities, including China Cinda Asset Management.

The other new director is Siu Shawn, chairman of China Evergrande New Energy Vehicle Group Limited (0708.HK).

Evergrande said in October it would prioritize growing its fledgling electric vehicle business over its struggling core real estate operations. Read more

ASSET SALES

Regulatory restrictions on borrowing have plunged China’s real estate sector into crisis, pointed out by Evergrande, which was once the country’s best-selling developer but is now the most indebted real estate company in the world.

In recent months, Beijing has taken steps to restore stability in the sector, including facilitating the buyout of troubled assets from indebted private companies by public developers, according to a source.

Guangzhou-based Agile said on Monday it sold its 26.7% stake in a mixed-use resort to one of the joint venture partners, state-owned developer China Overseas Land (COLI) (0688.HK), for 1.84 billion yuan ($291). million).

The complex is Guangzhou Asian Games City, and COLI had a 20% stake in it before the purchase.

Shimao, which has a 26.7% stake in the same resort, is also trying to sell its stake to COLI, local media Cailianshe reported. Shimao did not respond to a request for comment.

Last week, Shimao said it sold commercial land in Shanghai for 1.06 billion yuan to a company owned by the Shanghai municipal government to reduce its debt. Read more

($1 = 6.3327 Chinese Yuan)

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Reporting by Clare Jim; Editing by Himani Sarkar

Our standards: The Thomson Reuters Trust Principles.

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