China Evergrande Group said a deal to sell a 50.1% stake in its property services unit to Hopson Development has fallen through. delivering a blow to embattled developer's hopes of avoiding a potentially disruptive default.
If the deal to sell Evergrande Property Services had gone through, it would would have been worth $2.6 billion, Evergrande said.
Evergrande really needed that deal to help it pay down $300 Billion in debt.
An Evergrande bond due March 23, 2022 will officially be in default if the company does not make good after a 30-day grace period for a missed coupon payment that had been due on Sept. 23.
While Evergrande struggles to pay pay its debts, it still has 1.6 million units under construction that it needs to complete as the Chinese housing market is now falling. China Home Prices Drop For The First Time Since 2015 As Existing Home Sales Crash 63%. China’s home prices fell for the first time in six years as the property slump deepens in the world’s second-largest economy. New-home prices in 70 cities, excluding state-subsidized housing, slid 0.08% in September from August, the first drop since April 2015. Values in the secondary market declined 0.19%, down for a second month.
Average housing prices in the primary market edged down 0.5% mom annualized in September, the first sequential decline since April 2015. Property prices in tier 1 cities rose 1.3% mom annualized in September after seasonal adjustments, moderating from 3.2% in August. Price appreciation in tier 2 cities also slowed to 1.9% mom annualized in September from 5.8% in August. Property prices in tier 3 cities fell further by 1.5% mom annualized in September following a decline of 1.0% in August and prices in tier 4 cities dropped 7.5% mom annualized in September (vs. -2.3% in August).
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