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Embattled property developer China Evergrande Group said that its subsidiary Evergrande Group (Nanchang) may have to sell 1.28 billion shares held in Shengjing Bank to meet debt obligations, according to a filing to the Hong Kong Stock Exchange.
An arbitration ruling it received stated that the applicant has the priority to receive compensation covering the 7.3 billion yuan pledge under the guarantee and other expenses as the borrower had failed to repay the loan.
In July 2021, the guarantor, who was not named in the statement, provided a guarantee for the borrowings of certain entities controlled by Evergrande, the company said.
Nanchang provided counter-guarantees in the form of a pledge of a total of 1.3 billion shares that it held in Shengjing Bank Co., Ltd. “As the borrowers failed to repay the loans, the applicant carried out its obligations under the guarantee and claimed against the subsidiary under the pledge,” it said.