It looks like the founder and chairman of China Evergrande Group (EGRNY) is dipping into his own personal wealth to help keep the company afloat. Last Thursday, billionaire Hui Ka Yan sold $343m worth of his shares in Evergrande, reducing his stake from 77% to 67.9%.
Mr Hui’s proceeds from the sale would’ve been quite a bit more had Evergrande’s stock price not fallen by more than 80% so far this year over major solvency issues. According to filings of the sale, Hui sold 1.2b shares at an average price of $0.29. The average sale price Hui locked in was 20% lower than the previous day’s closing price.
According to sources familiar with the matter, Hui will use the $343m from the sale to help fund the real estate developer and chip away at interest payments on its more than $300b in liabilities.
Why it matters
Evergrande has been scrambling to raise enough cash to cover its interest payments and thereby avoid a total default. Within the last several weeks, the company has liquidated two jets and sold equity stakes in a Chinese bank, a Hong Kong residential project, and a business venture with Tencent Holdings (TCEHY).
