By Jonathan Easton
China Evergrande Group, the country’s second-largest property development business, has sold its 18 per cent stake in streaming company HengTen Networks Group.
Evergrande has agreed a HK$2.13 billion (US$273.5 million) sale, representing a loss of HK$8.5 billion, as the property developer struggles to avoid defaulting on its debts.
The departure represents a dramatic change for HengTen over the course of 12 months. In October 2020, Evergrande held a 55.6 per cent stake in HengTen but had been reducing its stake ever since due to mounting debts, with buyers including Ke Liming, owner of HengTen subsidiary Pumpkin Films Ltd.
While Evergrande has come up short from its investment in HengTen Networks Group, the film and television production company as benefitted from the sale with the deal sending its share price up by more than 25 per cent.
The sale will also leave Tencent, which has a 23.9 per cent stake in HengTen, a greater opportunity to increase its influence in the company that formerly operated as photographic accessories business Mascotte Holdings Ltd.
