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Evergrande’s staunchest allies drop out as Chinese property developer’s creditworthiness deteriorates amid debt woes
- Joseph Lau Luen-hung and Chan Hoi-wan sold 138 million Evergrande shares several times last month for HK$500 million, according to exchange filings
- Lau and Chan cut their stakes to 7.96 per cent, second only to Hui Ka-yan’s controlling stake of 70.7 per cent in Shenzhen-based Evergrande
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Two of the property magnate Hui Ka-yan’s staunchest allies appear to be bailing out of China Evergrande Group, selling a large chunk of the developer’s stock ahead of a gathering storm and deteriorating credit ratings over US$300 billion in liabilities.
Joseph Lau Luen-hung, the founder of Hong Kong developer Chinese Estates Holdings Limited, and his wife Chan Hoi-wan, sold 138 million Evergrande shares several times in the past month for about HK$500 million (US$64 million) in total, according to exchange filings. Lau and Chan reduced their holdings in the Shenzhen-based developer to 7.96 per cent, second only to Hui’s controlling stake of 70.7 per cent.
The couple’s disposals followed an 85 per cent plunge in Evergrande’s stock price and market value in the past year, as the property developer struggles to find cash to settle financial liabilities estimated at US$300 billion.
Every avenue of bank financing for Evergrande has been choked off by the People’s Bank of China after the company, the world’s most indebted developer, blew through all three of the central bank’s “red line” debt allowances last year. Spokespeople of Chinese Estates and Evergrande declined to comment.
In a friendship and alliance forged through weekly card games going back more than a decade, Chinese Estates had been involved either as a buyer or the seller in almost every financial transaction by Evergrande since Hui listed his property company for HK$6.5 billion in Hong Kong.
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