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China’s Evergrande Avoids Crisis With Last Minute Cash-Injection

China’s Evergrande Avoids Crisis With Last Minute Cash-Injection
Source: Bloomberg

Cash-strapped Evergrande, a Chinese real estate company, has raised roughly $145 million (£107 million) just before a deadline for a new loan interest payment.

HengTen Networks Group, which produces films and television series and runs a streaming platform, has sold a 5.7 percent share in the company.

Evergrande has a $148 million interest payment due this week.

It has avoided defaulting on its obligations thus far by making late payments just before grace periods of 30 days expired.

Evergrande possessed a controlling position in HengTen at the start of this year, but it has subsequently sold a number of shares in order to satisfy its financial obligations.

Tencent, a Chinese technology company, is HengTen’s other major corporate stakeholder, having purchased a 7% interest from Evergrande for $266 million in July.

With the latest share sale, Tencent has become the media company’s largest stakeholder, with a nearly 24 percent holding.

Apart from HengTen, Evergrande recently sold Protean, an electric motor manufacturing company situated in the United Kingdom.

It didn’t reveal how much money it made from the sale of the firm, which it purchased for $58 million in 2019.

Evergrande, on the other hand, has failed to sell some of its other properties in recent months as it tries to obtain funds for loan interest payments.

The business froze trading in its shares on the Hong Kong Stock Exchange last month ahead of a “significant transaction” announcement.

After a 17-day ban, Evergrande said that a $2.6 billion plan to sell a share in its property services company had fallen through due to a breakdown in negotiations.

Evergrande’s $300 billion debt mountain, as well as the company’s difficulties repaying its debts, have sparked worries that the company’s probable collapse might send shockwaves across global markets.