China Evergrande will exit its remaining 14.57% stake in Shengjing Bank for RMB 7.3bn ($1.1bn) as per sources. The stake will be bought by a state-owned entity, the only bidder so far. Proceeds will be used to repay debt that Evergrande owes the bank. Since proceeds will be used for this purpose, the sources mentioned that the stake sale will not help bondholders or homebuyers of its stalled projects. Evergrande used to originally own a 36% stake in the bank and had started trimming it down since September 2021 when it sold a 20% stake to the local government for ~$2.8bn. The company continues to struggle under its debt crisis with restructuring plans along the way. Most recently, the developer saw a winding-up petition being pushed to November 7 which one of its investors had filed in June.
Evergrande’s dollar bonds are trading at 5-8 cents on the dollar.
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