Key Evergrande Backer Trims Stake in Sign of Waning Support
(Bloomberg) -- A long-time supporter of China Evergrande Group’s Hui Ka Yan cut her stake in the developer for the first time since she started accumulating them four years ago.
Chan Hoi-wan, chief executive officer of Chinese Estates Holdings Ltd. and wife of Hong Kong billionaire Joseph Lau, sold 6.3 million shares at an average of HK$4.48 each on Thursday, according to a disclosure to the Hong Kong stock exchange. The sale, which raised HK$28.3 million ($3.6 million), reduced her holding to 8.96% from 9.01%.
The stake sale, while small, comes amid mounting losses for Hui’s backers as shares in Evergrande and its units plunge. Lau and his wife are some of the billionaire’s closest allies and have done numerous transactions with the conglomerate over the years. Chan herself invested HK$3 billion in a share placement in Evergrande’s green car unit in January.
Evergrande said on Tuesday it risks defaulting on its debt if the company falls short in efforts to raise cash by offloading assets, selling properties and bringing in new investors. Evergrande shares have fallen 71% this year, while its bonds are near record lows.
Chinese Estates swung to a loss in the first half of the year due to the drop in income from Evergrande, which cut its annual dividend in March and later decided against a special payout. The paper loss of its Evergrande stock holdings amounted to HK$4.11 billion. There was no immediate response from a representative of Chinese Estates to Bloomberg questions.
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