Hui Ka Yan Raises $343 Million By Cutting Evergrande Stake For First Time Since IPO

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Chinese billionaire Hui Ka Yan has cut his stake in Evergrande by 9.1%, raising HK$2.7 billion ($343 million) as the deeply indebted property developer continues its scramble for cash.

Shares of the Hong Kong-listed company fell 8% on Monday, after falling more than 10% on Friday. a filing Hui, 63, who traded on the Hong Kong Stock Exchange that day, sold 1.2 billion Evergrande shares at HK$2.23 on Thursday. The price represents a 20% discount on Evergrande’s closing price the day before.

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Evergrande did not respond to an e-mailed request for comment. The filing did not disclose who bought the shares. The embattled billionaire now owns 67.9% of the company with his wife Ding Yumei, down from 77%.

The share settlement – the first of its kind since Evergrande’s initial public offering in 2009 – comes as Hui has been prompted to use his personal assets to ease the company’s cash crunch. State-affiliated news outlet Yicai recently reported that it had already injected more than $1 billion in cash to improve the beleaguered developer’s liquidity and maintain its day-to-day operations. Hui raised funds by pledging shares and disposing of assets such as private jets, and the proceeds likely helped the company avoid default and pay off bond interests just before the deadline.

Still, it’s not clear how Evergrande plans to solve its larger liabilities. The company is close to meeting more than $300 billion in total debt it once borrowed from financial institutions as well as average employees to sustain its rapid expansion into China’s real estate sector. Financial leverage and a government crackdown on housing prices have significantly reduced funding available to property developers, with investors dumping their stocks and bonds across the board.

Speculation over Evergrande’s potential fate has ranged from prolonged debt restructuring to the breakup of the company, which has spurred interest in businesses such as football, theme parks and mineral water.

Hui, on his part, said in October that he wanted Evergrande to move from developing assets to building electric vehicles. However, the plan has been met with widespread skepticism, and Evergrande’s Hong Kong-listed electric car arm, Evergrande New Energy Vehicle Group warning publicly about its “serious lack of funds”. company said Last week it is still negotiating possible disposal of properties and projects with potential buyers. This sold Earlier this month in-wheel motor maker Proteus Electric for an undisclosed amount.

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