Shares Worth $1 Billion in HK Clearing System: Evergrande Update

(Bloomberg) -- China Evergrande Group shares worth nearly $1 billion appeared in Hong Kong’s Central Clearing and Settlement System, a sign that founder Hui Ka Yan may be pledging part of his stake as collateral for loans.

Billionaire owners of Chinese developers have dipped into their own pockets for at least $3.8 billion to save their troubled companies from default, as a cash crunch engulfs the industry. 

China Evergrande Group, whose share price dropped more than 80% this year, will be removed from the Hang Seng China Enterprises Index, the Hang Seng Indexes Company said late Friday.

Key Developments:

Evergrande Stake Worth $1 Billion Enters H.K. Clearing System (3:13 p.m. HK)

Evergrande Group shares worth nearly $1 billion appeared in Hong Kong’s Central Clearing and Settlement System on Friday. The 2.8-billion share stake was reported to CCASS by Haitong International Securities Co. In October, a 500-million share jump in Haitong’s CCASS holdings coincided with a pledge by Hui of the same amount. The billionaire property tycoon and his wife own more than 76% of Evergrande’s outstanding shares.

Central China Real Estate Bonds Rise on Parent’s Funding Plan (12:07 p.m. HK)

Central China Real Estate’s dollar bonds jumped after the company’s parent Central China Group said it will receive no more than 10 billion yuan in a strategic cooperation pact with Zhongyuan Bank.

The developer’s 7.65% note due 2023 was indicated 11 cents higher on the dollar at 71.2 cents, set for the highest close since Sept. 13, Bloomberg-compiled prices showed as of 4:25 p.m. in Hong Kong.

Property Firms Issued Most of China’s Short-Term Offshore Debt, Moody’s Says (11:46 a.m. HK)

Around 90% of Chinese companies’ $12.6 billion in outstanding offshore short-term bonds were issued by high-yield or unrated borrowers, with the property industry making up two-thirds of the amount, says Moody’s.

Refinancing risks will stay high through mid-2022 “for highly leveraged developers that rely on the bond market,” analysts including Ivan Chung wrote in a report.

Evergrande EV Unit Falls After Selling $347 Million in Shares (10:31 a.m. HK)

Evergrande’s electric-vehicle unit fell after selling the HK$2.7 billion in shares at a discount to bolster its finances as it seeks to put delayed vehicles into production.

China Evergrande New Energy Vehicle Group Ltd. sold 900 million shares at HK$3 each, 15% below Friday’s closing price. The stock, representing 9% of the firm, was sold to at least six investors, it said. The shares fell to HK$3.49 after the sale and proceeds add to the $64 million it raised on Nov. 10. 

Evergrande Property Services Appoints New Non-executive Director (8:09 a.m. HK)

Evergrande Property Services appointed Wen Yanhong as independent non-executive director, according to Hong Kong stock exchange filing late Friday. Wen will be paid HK$504,000 a year.

CTF Backs VMS Takeover of Evergrande H.K. Project, Ming Pao Says (7:30 a.m. HK)

Chow Tai Fook Enterprises, a private-investment company backed by the family of late Hong Kong property tycoon Cheng Yu-tung, is offering loans to back VMS Group’s takeover of one of Evergrande’s Hong Kong residential projects, Ming Pao reports, citing unidentified people.

The residential project, named “The Vertex”, will be used as collateral with an expected market value of about HK$2.4 billion, it said.

China Property Moguls Use Billions of Their Own Cash on Rescues (5 a.m. HK)

Billionaire owners of Chinese developers have dipped into their own pockets for at least $3.8 billion to save their troubled companies from default. 

From sales of luxury assets to stakes in sought-after listed companies, their personal balance sheets have become key for investors to determine whether property developers will meet their debt obligations. Founding chairmen of at least seven real estate companies have tapped their wealth in recent weeks to support the firms. 

A look at Evergrande’s maturity schedule:

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