The Evergrande Group is planning to sell its entire stake in a Hong Kong-listed film and television production company for $2.13 billion Hong Kong ($273.5 million), the latest move by the conglomerate to generate money.
The company will have a loss of about $8.5 billion on the transaction, calculated based on the difference between the consideration and the book value of the shares sold at the end of June.
The Evergrande Group had borrowed heavily and expanded aggressively for years, buying hundreds of plots of land across China, building large high-end residential developments, and selling many apartments years before completion. It also branched out into theme parks, health services and electric vehicles.
Over the summer, cash flow problems increased for the company and bond prices tumbled to harrowing levels, preventing the company from turning to the capital markets to raise more funds. The spree left the Chinese real estate giant with about $300 billion worth of liabilities at the end of June, including about $20 billion in dollar-denominated bonds. Payments for multiple titles are due next week. The proceeds from the divestment will be used for the company’s general working capital, said the Evergrande Group.
Reference: CNN Brasil
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