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Shares of Evergrande Property Services surged following recent news that the company received bids from potential buyers interested in acquiring a majority stake. The company’s stock closed up 20.7%, reaching HKD 1.11 (about 14 US cents) in Hong Kong today, after experiencing an earlier jump of over 40%. Trading was halted yesterday as the company prepared to disclose significant updates.
The liquidators overseeing Evergrande’s assets have received non-binding proposals from various interested parties to purchase a controlling interest in the subsidiary based in Guangzhou. These offers are still in the preliminary stages, with no formal negotiations underway. The company plans to invite selected bidders for discussions around November to negotiate binding agreements.
Market speculation suggests that two state-sponsored developers, China Overseas Land and Investment and China Resources Land, might be among the potential buyers, although both firms have denied these rumors.
With total liabilities estimated at CNY 2.4 trillion (approximately USD 337 billion), Evergrande began liquidation procedures after a winding-up order was issued by the High Court of Hong Kong last January. Since then, efforts have been focused on selling its 51% ownership stake in Evergrande Property Services.
Earlier attempts to sell this stake to Hong Kong developer Hopson Development Holdings in 2021 fell through due to disagreements. Despite the parent company’s financial troubles, Evergrande Property Services remains a valuable asset, maintaining profitability throughout its parent’s bankruptcy.
In the first half of this year, the property service division reported a net profit of CNY 472 million (around USD 66.3 million), representing a 6% decrease compared to the previous year. Meanwhile, revenues increased by 7%, reaching CNY 6.6 billion (about USD 926.8 million).
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