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China Evergrande Group said it plans to raise about $1.5 billion by selling a minority stake in a Chinese bank to a state-owned enterprise, an indication that authorities in the country are moving to contain the fallout from the property giant’s financial difficulties.
A unit of Evergrande reached a deal to sell nearly 20% of Shengjing Bank Co.
2066,
:, which is based in Shenyang in Liaoning province, to a company whose owners include the local branch of China’s State-owned Assets Supervision and Administration Commission as well as the local and provincial governments.
Evergrande
3333,
holds 34.5% of the Hong Kong-listed commercial bank, a regional lender that it invested in several years ago, and said its stake would drop to 14.6% following the deal, which needs regulatory approval. It said the sale was valued at about 9.99 billion yuan, the equivalent of about $1.55 billion.
Evergrande, the world’s most indebted property developer, has struggled in recent months to raise cash and meet its financial obligations after borrowing heavily from large and small investors, banks, suppliers and home buyers who paid in advance for apartments that the company promised to build. It reported the equivalent of $304 billion in liabilities at the end of June, including $88.5 billion in interest-interest-bearing debt.
