Evergrande Is in Talks to Sell Hong Kong Headquarters Building
(Bloomberg) -- China Evergrande Group is in discussions to sell its Hong Kong headquarters as part of efforts to stave off a cash crunch, according to a person familiar with the matter.
China’s most indebted developer is in talks with state-owned Yuexiu Property Co. to sell the office tower in Wan Chai, the person said, asking not to be identified because the matter is private. While the two companies are still negotiating and nothing is decided, Evergrande has floated a potential price tag of more than $2 billion, the person said. That compares with its HK$12.5 billion ($1.6 billion) purchase cost in 2015.
Evergrande didn’t immediately respond to requests for comment. Calls to Yuexiu Property’s Hong Kong and Guangzhou offices went unanswered. REDD reported the talks earlier.
Regulators are urging Evergrande to resolve its debt risks, prompting the company to offload assets and accelerate property sales to reduce leverage. It has so far struggled to revive confidence among creditors, suppliers and some home buyers who worry the company will struggle to make good on its $300 billion mountain of liabilities.
Potential sources of future funding for Evergrande include placements for its listed electric vehicle and property management units, and initial public offerings for operations including its beverage business, FCB, and amusement park and tourism properties, Fitch Ratings has said. The Shenzhen-based developer has some $80 billion worth of equity in non-property businesses that could help generate liquidity if sold, Agnes Wong, a Hong Kong-based analyst with BNP Paribas SA, wrote in a June report.
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