Chinese Evergrande Group's stake in Shengjing Bank Co was forced to be sold in an effort by the Great Wall government to protect its financial system.
The sale of the stake was disclosed by an anonymous source who said Evergrande's investment in the bank had ended to allow room for debt relief.
It was explained that a state-owned entity will buy Evergrande's remaining 14.57% stake in Shengjing Bank for 7.3 billion Yuan or RM4.72 billion as a settlement of the company's debt to the financial institution.
For information, Evergrande owns a 36% stake in Shengjing Bank with a value of $2.8 billion.
Even so, the sale is said to have no impact on bondholders or buyers of the delayed housing project.
For the record, Evergrande once sold almost 20% stake in Shengjing Bank as part of its debt restructuring in September last year.
So far, neither Evergrande nor Shengjing Bank or the Shenyang State Government Asset Supervision and Administration Commission have commented further on the sale.
But what is known is that the move was made to ensure that China's financial system, affected by Evergrande's debt, remains intact.
Evergrande's debt crisis, leading to default, has caused a loss of confidence among millions of homeowners with liquidity drying up in the property sector causing construction delays and boycotts.
