Evergrande Group Sells Holdings in HengTen Networks for $92 Million, Tencent Becomes Largest Shareholder
Chinese property developer Evergrande Group successively sold its shares in HengTen Networks on November 4 and 5, cashing out about HKD 717 million ($92.1 million) in total and lowering its shareholding ratio from 26.55% to 22.98%, the HKEx website showed.
After this reduction, Evergrande will be the second largest shareholder in HengTen Networks, while Tencent will become its largest shareholder with a shareholding ratio of 23.9%.
HengTen Networks used to be a traditional manufacturing enterprise, and its main business was the online sale of furniture, household appliances, fabric and kitchen supplies. In October, 2020, HengTen Networks announced that it would acquire Ruyi Films at the price of HKD 7.2 billion, and its main business turned to film and television.
According to the performance report released by HengTen Networks for the first half of 2021, the firm’s net loss reached 2.448 billion yuan ($382.66 million) in the first half of the year, compared with profits of 7.18 million yuan in the same period last year. Its revenue was 1.395 billion yuan, compared with 133 million yuan in the same period last year.
Evergrande’s top priority now is to resume production and ensure delivery. At a meeting held on October 22, Xu Jiayin, Chairman of the Board of Directors of the company, announced Evergrande’s three major strategies to resolve risks: unswervingly achieve resumption of production, implement the sales of existing buildings and realize a transformation from the real estate industry to new energy automobiles within 10 years.
Evergrande Group disclosed on November 3 that from July to October this year, the company completed 546 batches of building delivery, involving 184 different projects and 57,462 owners.
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On November 4, at an internal meeting, Xu cheered the firm’s employees and said: “The more difficult the company’s time is, the more determined everyone should be. Real estate is a capital-intensive industry and needs huge cash flow. We must go all out to resume production and ensure the delivery of buildings, so as to solve the debt risk.”