Troubled Chinese property developer Evergrande said it plans to sell a 9.99 billion yuan stake in Shengjing Bank on Wednesday.
Evergrande must pay 40.7 million euros in bond interest on Wednesday, a deadline that investors are closely watching.
The buyer of the Evergrande stake, which represents nearly 20 percent of the bank’s issued share capital, is Shenyang Shengjing Finance Investment Group, a state-owned capital and asset management company.
According to sources, the Chinese government urges state-owned companies to buy up some of Evergrande’s assets. State-owned Shenyang Shengjing’s stake in Shengjing Bank will grow to 20.79 percent after the deal. This makes the state-owned company the largest shareholder in the bank.
With the sale, Evergrande will reduce its stake in Shengjing Bank from 34.5 to 14.75 percent. According to Evergrande, the bank has demanded that the project developer use the sale proceeds to settle its financial obligations to Shengjing Bank.