China Strategic seeks to offload 1.4% stake in Evergrande vehicle unit

FILE PHOTO: The China Evergrande Centre building sign is seen in Hong Kong, China. August 25, 2021. REUTERS/Tyrone Siu/File Photo

Securities trading and money lending company China Strategic Holdings Ltd said on Tuesday it planned to sell up to a 1.37% stake in a unit of indebted developer China Evergrande Group – and could do so at a significant discount.

China Strategic said in a filing to the Hong Kong stock exchange it would ask shareholders at an extraordinary general meeting to allow directors to dispose of up to 133.6 million shares in China Evergrande New Energy Vehicle Group.

The aspiring electric vehicle maker has a market capitalisaion of HK$28.33 billion ($3.64 billion), according to Refinitiv Eikon data. That indicates a current market value of HK$388 million for a 1.37% stake.

To make any disposals more attractive, however, China Strategic said it would be willing to sell at a 20% discount to the five-day average closing price of Evergrande Vehicle shares. For the five days prior to Tuesday, that works out at around HK$2.76 ($0.35) per share, it added.

Evergrande Vehicle’s shares are currently at HK$2.90.

The stock is down more than 90% so far this year as concerns mount across global markets that its parent’s $305 billion in debt could trigger widespread losses in China‘s financial system in the event of a collapse.

“The company acquired the Evergrande Vehicle shares for investment purpose,” China Strategic said in the filing.

“Having regard to the recent significant price fluctuations of the Evergrande Vehicle Shares, the board decided to restructure its investment portfolio and to solidify the financial and cash position of the group,” it added.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.