China Evergrande’s Stake in Services Unit Falls to 51.7% Due to Forced Selling

HONG KONG (Reuters) – The shareholding of China Evergrande Group in its property services division has decreased to 51.71% from 58.18%, following the forced sale of pledged shares by a third party, according to a filing with the Hong Kong stock exchange.

The share reduction involved 700 million shares of Evergrande Property Services Group and resulted from actions taken on December 14 to enforce rights on shares that were held as collateral against the financially troubled property developer, the filing indicated.

Details regarding the identity of the entity that sold the pledged shares have not been immediately determined.

This event marks the second instance of pledged shares being enforced within a year; previously, the group’s stake had declined from 60.96%.

Trading of shares for both Evergrande Group and Evergrande Property Services has been halted since March, pending the announcement of their 2021 financial results and an investigation into a bank’s enforcement of a pledge guarantee related to the services unit.

Evergrande Group is currently facing over $300 billion in liabilities and is in the process of restructuring its debt after defaulting late last year.