Chinese Estates Holdings (0127. HK), the 2nd biggest shareholder of China’s Evergrande (3333. HK), said it sold $32m worth of its Evergrande stake on Thursday and planned to sell its entire stake.
“The directors are cautious and concerned about the recent development of China Evergrande Group including certain disclosure made by China Evergrande Group on its liquidity,” Chinese Estates said in a filing to the Hong Kong stock exchange.
With more than $300 billion in debt, Evergrande is currently on the brink of bankruptcy unless the Chinese Government intervenes, which seems unlikely as days pass by. Following the announcement, Chinese Estate holdings shares spiked as much as 15% at one point.
Bloomberg reported that the People’s Bank of China (China’s central bank) had injected 110 bn Yuan ($17 bn) of cash with seven and fourteen-day reverse repurchase agreements. Before Thursday, the PBOC had injected liquidity for three straight sessions, stoking bets that Beijing hopes to soothe market nerves over Evergrande.