China Evergrande Group shed its entire shareholding of about 14.07% in China Vanke Co. Ltd. for roughly 29.20 billion Chinese yuan.
Under a June 9 deal, Shenzhen Metro Group Co. Ltd. agreed to buy 1,553,210,974 A shares of China Vanke from China Evergrande subsidiary Hengda Real Estate Co. Ltd. and its units at 18.80 yuan apiece. As of March 16, Shenzhen Metro had a 33.35% stake in China Vanke.
China Evergrande, which acquired the shares in 2016 for about 36.27 billion yuan, said in a filing that it expects to incur a loss of about 7.07 billion yuan as a result of the sale.
Pursuant to the deal, Shenzhen Metro will initially pay about 65.5% of the share transfer price amounting to about 19.10 billion yuan before June 16, with the rest of the amount to be paid before June 28. Once the payment is made in full, the parties will procure the transfer and registration of the relevant shares.
China Evergrande noted that the stake sale is its strategic development requirement, adding that it intends to use the net proceeds mainly for debt repayments.
As of June 9, US$1 was equivalent to about 6.80 Chinese yuan.