Evergrande Raises $273m from Streaming Site Sale

The asset disposal spree by debt-laden property developer China Evergrande Group continued on Thursday with its sale of a stake in Hong Kong-listed HengTen Networks Group for HK$2.13 billion ($273 million).

HengTen, a wholly-owned subsidiary of Evergrande, is a diversified group with interests ranging from property leasing to community internet services and streaming video. It has been referred to as a Chinese Netflix.

The buyer is Hong Kong-based Allied Resources. HengTen’s shares rose nearly 20% in Thursday trading. Evergrande’s slump continued, with its stock shedding 3% on Thursday and about 80% in the year to date. Allied’s shares were flat.

Evergrande said it expects to incur a loss of HK$8.5 billion from the sale, and plans to use the proceeds for general working capital. Evergrande and Tencent bought HengTen in 2015.

Stumbling Among Deadlines

The Shenzhen-based Evergrande has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities, $19 billion of which are international bonds.

In many cases, Evergrande is selling off assets at a loss, such as an electric motor unit for 14.6 million yuan – a business that it spent 500 million yuan to buy.

As the developer scrambles to meet its debt obligations, its founder is freeing up funds from luxury assets including art, calligraphy and two high-end homes, according to filings and a person with knowledge of the matter.

Chinese authorities last month reportedly told Evergrande chairman Hui Ka Yan, 63, to use some of his personal wealth to help pay bondholders.

Evergrande’s troubles in meeting bond repayments have rattled markets and left many of its investors, creditors and suppliers in financial chaos.

Guo Hui, whose cleaning business is owed more than 18 million yuan ($2.8 million) by Evergrande, had to sell his Porsche Cayenne and an apartment to raise cash and pay debts.

Country Garden Services to Raise $1bn

In related news, Country Garden Services, the property management unit of China’s top developer Country Garden, is selling 150 million new shares at HK$53.35 ($6.85) each on Thursday to raise $1.03 billion, according to a term sheet seen by Reuters.

The number of shares represents 4.5% of the enlarged shares and the selling price represents a 9.5% discount to the last traded price of HK$58.95 on Wednesday. The stock was suspended from trading on Thursday.