China Evergrande unit gets bids from state-owned companies
Liquidators of the property developer have been combing through the company’s assets looking for opportunities to recoup funds
[HONG KONG] China Evergrande Group’s liquidators have received non-binding offers for a property management unit they have been seeking to offload, according to sources familiar with the matter.
Units of state-owned China Overseas Holdings and China Resources Holdings are among the bidders indicating interest in Evergrande Property Services Group, according to the sources, who asked not to be identified discussing private matters.
Each bid must be accompanied by a deposit of HK$6 million (S$987,370), 10 per cent of which is non-refundable, the sources said. The bidding process is still preliminary and is subject to change, they added.
Evergrande Property Services confirmed it has received a letter from Evergrande’s liquidators, saying they are seeking to sell the group’s shares in the property management unit.
The liquidators have signed confidentiality agreements with interested parties and received non-binding indicative offers from some suitors as at Sep 9, Evergrande Property Services said in a Hong Kong stock exchange filing on Thursday (Sep 11) night.
The company added that the liquidators have not conducted negotiations with any potential party, as the potential deal is still at a preliminary stage.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Selected parties
They intend to invite selected potential parties to submit final proposals for a deal in November and would negotiate terms with them, according to the filing.
After a halt on Thursday, trading of Evergrande Property Services resumed on Friday morning, jumping as much as 40 per cent, the biggest rise in eight months. Its shares have plummeted about 95 per cent from a peak in 2021 and have traded as a penny stock for several years now.
Other property management companies’ shares also rose. Country Garden Services Holdings and Greentown Service Group both climbed more than 3 per cent.
Meanwhile, Morgan Stanley raised the price targets of some Chinese property management and services companies. First-half results “showed early signs of stabilisation”, analysts Cara Zhu and Stephen Cheung wrote in a note, adding that they expect faster earnings growth in the second half.
Liquidators of Evergrande, whose default in 2021 was emblematic of China’s years-long property debt crisis, have been combing through the company’s assets looking for opportunities to recoup funds.
They have said that Evergrande Property Services plays a key role in asset recovery for creditors.
Bloomberg News reported last month that they have been working with UBS Group and Citic Securities to seek potential buyers.
Evergrande’s liquidators declined to comment. China Overseas Holdings and China Resources Holdings did not immediately respond to requests for comment.
The property management arm reported net income of one billion yuan (S$180 million) in 2024, according to its annual report. The unit has a market capitalisation of HK$9.9 billion, according to Bloomberg-compiled data.
Monumental task
China Evergrande’s liquidation has been a monumental task as the firm comprises thousands of legal entities in multiple jurisdictions, as well as about 3,000 projects under the property management unit’s business, according to the liquidators.
China Evergrande was removed from the Hong Kong stock exchange on Aug 25, after more than a decade and a half of trading.
Share with us your feedback on BT's products and services
