Update | Mainland China developer Evergrande increases stake in Shengjing Bank
Evergrande to pay 10 billion yuan (HK$ 11.9 billion) to boost stake in Shenyang-based lender to 27.24 per cent
Debt-laden mainland China developer Evergrande Real Estate said on Thursday it will pay 10 billion yuan (HK$ 11.9 billion) to increase its stake in Shengjing Bank to 27.24 per cent, further expanding its footprint in the financial sector.
Evergrande, China’s second-largest home builder, said in a statement to the Hong Kong stock exchange it would buy 1 billion Shengjing shares from five domestic shareholders for an additional 17.28 per cent stake in Shengjing Bank.
Guangzhou-based Evergrande, controlled by billionaire Hui Kayan, has not missed a beat in its acquisition spree despite mounting debts. It bought a controlling stake in Zhejiang developer Calxon for 3.6 billion yuan last week and spent more than HK$70 billion to acquire property assets on the mainland and in Hong Kong in the second half of last year, including the HK$12.5 billion purchase of the Mass Mutual Tower office building in Wan Chai.
Shengjing Bank, a regional commercial bank based in Shenyang, the capital of Liaoning province, was granted a consumer finance licence in January, becoming one of the first 15 companies to hold such a licence on the mainland.
“The acquisition is expected to generate high investment return and will prove to be a reasonable investment,” Hui said in the filing.
Evergrande has branched out into various non-real-estate sectors including bottled water, health care and solar power in recent years. The developer also ventured into the financial sector last year by acquiring Great Eastern Life Insurance and changing its name to Evergrande Life Insurance.