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A group of state-owned companies in China’s northeastern city of Shenyang bought embattled property developer China Evergrande Group’s stake in Shengjing Bank in an auction for 7.3 billion yuan ($1.05 billion), according to information displayed on Alibaba auction platform on Wednesday.
Evergrande unit Evergrande Nanchang had been ordered to pay an unamed guarantor 7.3 billion yuan for failing to honour debt obligations. The unit has provided counter-guarantees in the form of a pledge of a total of 1.3 billion shares that it held in Shengjing Bank.
The 1.3 billion shares, or 14.6% stake in the bank, were auctioned by Shenyang Intermediate People’s Court at an opening bidding price of 7.3 billion yuan, showed the platform. Evergrande, which held 36.4% stake in the bank at the end of 2020, has been selling down its holdings since it slid into a debt crisis in the second half of 2021.
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.