Indebted China Evergrande to raise $2.2 billion from Xinjiang Guanghui stake sale

FILE PHOTO: An exterior view of China Evergrande Centre in Hong Kong

HONG KONG (Reuters) – Debt-strapped China Evergrande will raise 14.9 billion yuan ($2.23 billion) by selling a 40.96% stake in Xinjiang Guanghui Industry Investment Group to Shenergy Co <600642.SS>, a Xinjiang Guanghui subsidiary said on Sunday.

China Evergrande, the country’s most indebted property developer, will sell all the Guanghui stakes it had acquired for 14.49 billion yuan in 2018, according to a Guanghui Energy Co <600256.SS> disclosure.

Shenergy, a Shanghai-based power utility, will become the second-biggest shareholder of Xinjiang Guanghui, it said.

Evergrande, which owed 835.5 billion yuan ($125 billion) at the end of June, has been looking to raise cash from small banks and private trusts at high rates to fund developments, as proposed limits to the permitted size of real estate debt stymie big-bank lending.

(Reporting by Pei Li and Yingzhi Yang; Editing by William Mallard)