China Evergrande Group called off plans to sell a majority stake in its property-management unit for the equivalent of $2.6 billion, a major setback in the real-estate giant’s attempts to ease its liquidity crunch
The agreement was struck on Oct. 1 and was to be completed by Oct. 12. It was terminated by Evergrande, which said in a regulatory filing that it “had reason to believe…that the purchaser had not met the prerequisite to make a general offer for shares in Evergrande Property Services.” The business is listed in Hong Kong, and securities regulations in the city require a buyer of 30% or more of a public company to make a takeover offer to all its shareholders.
“The company is exploring the options available to it for the protection of its legitimate interests,” Hopson added. Evergrande, China’s most indebted developer, said it hasn’t made much progress unloading its assets, aside from aSales of its apartments, which tumbled over the summer, fell even more sharply in recent weeks, as the company’s widely publicized financial troubles spooked home buyers.
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