Evergrande shareholder Chinese Estates offers to go private
The firm’s remaining stake is being bought at HK$1.91b.
Chinese Estates Holdings Ltd., a shareholder of the embroiled Evergrande Group, has offered to go private after its stocks plunged to an 18-year low.
Billionaire Joseph Lau, who has 75% control over Chinese Estates Holdings, has offered to buy the real estate firm’s remaining stake at HK$4 apiece, or HK$1.91b ($245m), Bloomberg reported.
Lau’s move has been described by Bloomberg as the “biggest retreat yet” among long-time backers of Hui Ka Yan, the chairman of Evergrande.
The firm’s stocks plunged amid rising concerns on the possible impact of Evergrande’s debt crisis in China and HK’s property sector.
Chinese Estates was once a major shareholder of the crisis-hit Evergrande; however, the Lau-controlled company started to pare its stake in the property giant in August.
Selling off the company’s remaining shares in Evergrande this year would only result in potential losses of about HK$10.4b, the company said in a statement acquired by Bloomberg.
Chinese Estates said its group of directors is looking into possible consequences “in the event that the remedial measures said to have been taken and to be taken by China Evergrande Group could not be effectively implemented.”