HONG KONG (Reuters) – China Evergrande Group’s deal to sell a 51% stake in its property services unit has been put on hold, two people with knowledge of the matter said, in a blow to the embattled developer’s hopes of avoiding a potentially disruptive default.
Evergrande, teetering on the brink of collapse with more than $300 billion in debt, was in talks to sell the stake in Evergrande Property Services to smaller rival Hopson Development Holdings for around HK$20 billion ($2.6 billion), sources have previously told Reuters.
However, the deal has been put on hold as it has yet to win blessings from the Guangdong provincial government, which is overseeing Evergrande’s restructuring, one of the people said on Tuesday.
It’s not immediately clear why the provincial government has not approved the transaction. Some offshore creditors of Evergrande also opposed the deal, the person added.
When contacted, a Hopson representative asked Reuters to await an announcement. Evergrande and the Guangdong provincial government did not immediately respond to Reuters requests for comment.
The sources declined to be named as they were not authorised to speak to the media.
(Reporting by Julie Zhu and Clare Jim; Editing by Sumeet Chatterjee and Mark Potter)
