Image Source : China Visual

BEIJING, September 8 (TMTPOST) – State-owned companies of the Chinese northeastern city of Shenyang bought China Evergrande Group's shareholding in Shengjing Bank in an auction for 7.3 billion yuan ($1.05 billion), the Alibaba auction platform showed on Wednesday.

Evergrande Group, which gave up its controlling stake in Shengjing Bank in 2021, continued to liquidate its stake in this bank.

The winner of this auction is three local state-owned enterprises and four private enterprises, including Shenyang Heping District State-owned Assets Management Company Limited, Shenyang High-Tech Development Investment Holding Group Company Limited, Shenyang Ruijin Assets Management Company Limited, Beijing Guorui Holdings Company Limited, and so on.

Based on Shengjing Bank's net assets of RMB9.20 ($1.32) per share at the end of June, the price-to-book ratio was valued at about 0.619 times.

Evergrande told the Hong Kong stock exchange In July that its unit Evergrande Group (Nanchang) had received an arbitration ruling requiring it to pay RMB 7.3 billion ($1.05 billion) as compensation for loans of an equivalent amount that it had failed to repay to an unnamed creditor, which was the counterparty in the arbitration case.

In September last year, one week after missing its first offshore bond payment, Evergrande announced that it was selling an RMB 9.9 billion ($1.42 billion) stake in Shengjing Bank, which is headquartered in the city of Shenyang in Liaoning province, to a unit of the local government in order to raise money to meet its financial obligations.

Evergrande is struggling to repay its many creditors through asset sales and debt restructuring with more than $300 billion in liabilities.

Shengjing Bank, headquartered in Shenyang, Liaoning Province, formerly known as Shenyang City Commercial Bank, was renamed Shengjing Bank in February 2007. It was listed on the Hong Kong Stock Exchange on December 29, 2014. In 2016 and 2019, Evergrande Group became the controlling shareholder of Shengjing Bank through two rounds of capital increase and shareholding expansion by virtue of different opportunities, with the highest explicit shareholding ratio reaching 36.4%.