Evergrande liquidators sell controlling stake in property services unit for US$513 million

Liquidators of China Evergrande Group have reached an agreement to sell a controlling stake in its property management arm to investment firm PAG for US$513.6 million. This sale aims to help recover assets owed by the company to creditors, who are seeking repayment of US$46 billion. The 51.016 percent stake in Evergrande Property Services will be transferred to PAG, after the property management unit acquired approximately 5.52 billion shares from China Evergrande and its liquidation subsidiary, CEG Holdings.

Eddie Middleton, liquidator of Evergrande Property Services, expressed satisfaction with the completed sale, stating that it will allow the business to enter a new phase of growth. However, further steps are needed to finalize the transaction, including obtaining regulatory approval in mainland China. Upon completion, PAG will be obligated to make a cash offer for the remaining shares at HK$0.8359 per share, which is 29.5 percent lower than Evergrande Property Services' closing price on October 28.

The transaction will be subject to various conditions, including regulatory approval. Once completed, PAG will be required to offer an unconditional cash purchase for the remaining shares at HK$0.8359 per share. Prior to the announcement, Evergrande Property Services underwent a brief suspension in trading. Post-announcement, the company re-commenced trading on Friday.

PAG has stated its intention to keep Evergrande Property Services listed on the Hong Kong stock exchange and not to implement any substantial operational changes, aside from board-level adjustments.

Evergrande Property Services, a property manager serving mainland China, reported a revenue of 6.94 billion yuan (US$1 billion) and a net profit of 503 million yuan in the first half of 2026. However, the company's financial situation has been severely impacted by its parent company's collapse. China Evergrande utilized 13.4 billion yuan of its bank deposits as collateral for loans, and as of June, the property management unit had only recovered 9.5 million yuan from its parent and other entities, according to an interim report.

China Evergrande defaulted on its offshore debt in 2021, and the company was ordered to wind down by Hong Kong's High Court in January 2024. So far, liquidators have recovered only US$435.9 million through asset sales and loan recoveries, which amounts to less than 1 percent of the US$46 billion in creditor claims, according to the second progress report published earlier this month.