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A man drives a cart past apartment buildings as part of China Evergrande Group’s property and tourism development in Venice in Qidong, Jiangsu Province, China on Tuesday, September 21, 2021.
Qilai Shen | Bloomberg | Getty Images
Hong Kong-listed shares of investment holding company Chinese Estates surged Thursday after the company announced plans to potentially sell its entire stake in debt-ridden developer China Evergrande Group.
On Thursday morning, shares of Chinese Estates climbed to 15.14%. Some of those gains were reduced during the trading session, but the stock was still up 5.5% in the afternoon.
The gains came after Chinese Estates announced that it had sold more than 108 million shares of China Evergrande Group – representing around 0.82% of Evergrande’s issued share capital – from August 30 to September 21. The shares were sold for an average sale price of around HK $ 2.26 (around $ 0.29), Chinese Estates said Thursday.
The investment holding company also detailed its intention to seek shareholder approval for the potential divestiture of the remaining Chinese Estates shares in China Evergrande Group, which represent around 5.66% of the issued share capital by the struggling developer.
In the case, China Estates said its directors were “cautious and concerned” about recent developments regarding the China Evergrande group.
Days earlier, its chairman Lau Ming-Wai told CNBC’s Emily Tan that Beijing had “all the tools” to resolve the issue surrounding Evergrande.
“I think the mainland government is very well versed in dealing with events, shocks or crises, whether natural or man-made,” Lau said. “I think they have all the tools in their toolbox, whether monetary or fiscal, to solve this problem.”
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