State-owned companies in Shenyang – a city in China’s northeast – have bought China Evergrande Group’s shareholding in Shengjing Bank, according to an Alibaba auction platform on Wednesday.
The companies paid 7.3 billion yuan ($1.05 billion) at an auction for 1.3 billion shares held by Evergrande, it said.
In July, Evergrande, the world’s most indebted property developer, said its unit, Evergrande Nanchang, had been ordered to pay an unamed guarantor 7.3 billion yuan for failing to honour debt obligations.
The unit had provided counter-guarantees in the form of a pledge of a total of 1.3 billion shares it held in Shenyang-based Shengjing Bank, the firm said at the time.
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Court Set Bidding Price
According to the auction platform, the 1.3 billion shares in Shengjing Bank owned by Evergrande Nanchang were auctioned by Shenyang Intermediate People’s Court at an opening bidding price of 7.3 billion yuan.
The winner, a group of seven companies including Shenyang Heping District State-owned Assets Management Company and Shenyang Hi Tech Development Investment Holding Group, was the only bidder in the auction that closed on Wednesday.
Saddled with more than $300 billion in liabilities, Evergrande is struggling to repay its many creditors through asset sales and debt restructuring.
The 1.3 billion shares account for a 14.6% stake in Shenjiang Bank.
Evergrande, which held 36.4% in the bank at the end of 2020, has been selling down its holdings in the bank since it slid into a debt crisis in the second half of last year.
- Reuters with additional editing by Jim Pollard
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