June 29, 2022

FILE PHOTO: The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

China’s financially troubled property developer, Evergrande Group’s shares fell on Monday after its chairman trimmed his stake in the cash-strapped property developer to raise about $344 million, as much as 4.8%.

China Evergrande New Energy Vehicle Group Ltd., the group’s electric vehicle unit, after it said that they were still exploring ways to pump capital into the unit with different investors, also saw its shares fall more than 5%.

According to sources, the group is under $300 billion in liabilities and has been scrambling to raise capital. The Chinese authorities have also asked Hui Ka Yan, the group’s chairman, to use few of his personal wealth in order to pay bondholders.

The group on Nov. 6 failed to pay coupons of around $82.5 million due and investors are keeping an eye on it to see if it can meet its obligations before a 30-day grace period that ends on Dec 6.

On Friday, Hui reportedly have had sold 1.2 billion shares in the group at an average price of HK$2.23 each. Hence, lowering his stake in the company to 67.9% from 77%.

Fantasia Holdings also reported to have suspended trading in group shares on Monday pending release of information. The developer also mentioned to have a wrapped up a petition filed against its unit in relation to an outstanding loan.

On the other hand, Macau casino stocks also fell on Monday over the arrests of 11 people. The alleged people have been linked to cross-border gambling and money laundering, with the founder of the gaming hub’s biggest junket operator, Suncity.

• Shares in MGM China traded low at 10%.
• Wynn Macau shares lost 7.8%.
• Sands China shares fell 5.3%.

According to reports, the investors were troubled about the near-term potential loss of business along with the longer-term implications of the watershed hardline stance being taken towards the sector by authorities in Macau and mainland China.

The founder of Suncity Alvin Chau, as well as the CEO of gambling sector investment firm Suncity Group Holdings is widely believed to have been arrested.

The group’s shares, which have a market valuation of HK$1.7 billion ($220 million), were suspended from trade on Monday after crasing 165% so far this year.