(Bloomberg) -- China Evergrande Group plans to sell the rest of its stake in HengTen Networks Group Ltd. for HK$2.13 billion ($273 million), the latest asset disposal by the debt-stricken property giant.
The developer agreed to sell its 18% holding in the internet services firm to Hong Kong-based Allied Resources Investment Holdings Ltd. at HK$1.28 apiece, according to a Hong Kong stock exchange filing. That’s a discount of about 24% to the last close on Wednesday.
Evergrande said it expects to incur a loss of HK$8.5 billion from the sale, which comes as it tries to raise cash and make good on more than $300 billion in liabilities. The company is at the center of a debt crisis enveloping Chinese developers as they struggle with a leverage clampdown and a sales slump.
Evergrande will use the proceeds of the sale for general working capital, it said. The buyer, Allied Resources, is controlled by Li Shao Yu.
Shares of HengTen Networks have dropped 36% this year, while Evergrande has tumbled 81%.
Evergrande bought the Hong Kong-listed company with Tencent Holdings (OTC:TCEHY) Ltd. in 2015, renaming it HengTen as an internet firm focusing on the film business. Evergrande held a 55.6% stake in HengTen before October 2020, but it has been selling down its holding in recent months.
Earlier this month, Evergrande offloaded a combined 530 million shares in HengTen through the open market for HK$1.12 billion, Bloomberg calculations show. In late June, it sold part of its stake to Ke Liming, owner of HengTen subsidiary Pumpkin Films Ltd. In August, it raised $418 million by selling another stake in the firm.
(Updates with background from the fifth paragraph)
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