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Evergrande founder sells 9% stake for $344 million amid debt crunch

© Reuters. FILE PHOTO: China Evergrande Group Chairman Hui Ka Yan attends a news conference on the property developer’s annual results in Hong Kong, China March 28, 2017. REUTERS/Bobby Yip/File Photo

HONG KONG (Reuters) – The chairman of China Evergrande Group Hui Ka Yan sold 1.2 billion shares in the company at an average price of HK$2.23 each on Thursday, Hong Kong Stock Exchange filings show.

The share sale, which is worth a total of HK$2.68 billion ($344 million), lowers Hui’s stake in the Shenzhen-based real estate company to 67.9% from 77%.

Evergrande has been stumbling from debt deadline to deadline as it grapples with more than $300 billion in liabilities and Chinese authorities have told Hui, 63, to use some of his personal wealth to help pay bondholders, sources have said.

Hui, who is the property developer’s founder, is now freeing up funds by selling luxury assets including art, calligraphy and three high-end homes.

Evergrande failed to pay coupons totalling $82.5 million due on Nov. 6 and investors are on tenterhooks to see if it can meet its obligations before a 30-day grace period ends on Dec 6.

Hui’s share sale represented a 19.8% discount to Wednesday closing price of HK$2.78. Data from the exchange shows block trades priced at HK$2.23 per share were carried out in the pre-market on Thursday.

Before the filings, Evergrande shares closed down 10.4% at HK$2.5, versus a 2.7% drop in the broader market.

($1 = 7.7959 Hong Kong dollars)

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